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Why Renters Should Be Paying Attention to U.S. Housing Market

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Due to soaring mortgage rates, housing shortages and high prices Unfavorable market For Americans trying to buy a new home. However, even lessors who are not currently on the buying market can experience the impact of affordable home buying issues, as rents can rise.

“The upward pressure on home prices brings upward pressure on rent,” said Jerry Howard, CEO of the National Association of Home Builders (NAHB). Newsweek..

Many lessors have chosen to continue renting and wait Soaring prices in the housing marketBut now many can’t afford to move elsewhere. Rents have increased at double-digit rates across the country over the past year due to limited availability, according to data released in June by real estate agent Redfin. Those who remain in their current rent are also facing increased costs as the landlord has begun to raise the rent of their current occupants to offset the money they earned by charging new tenants high rent.

This situation “makes it difficult for the low-income earners to pay the rent,” Howard explained. “This is a total problem, probably as big as a supply shortage.”

Homes for sale are still scarce and expensive, so more and more renters are staying where they currently live. However, many of these people are suffering from rising rents. This dateless stock photo above shows a “rental” sign in the garden.
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Some experts believe that much of the current state of the housing and rental market is the result of a coronavirus pandemic. Immediately after COVID-19 swept across the country, many Americans began working in remote areas, and many fled the urban environment for a more idyllic environment or simply to secure more space. I tried. At that time, mortgage rates also plummeted, giving birth to many first-time homeowners.

However, during the pandemic, new home construction has been virtually stagnant for a long period of time, and supply shortages continue to affect buildings. As a result, demand far exceeded the supply of homes, and home prices soared rapidly.

The pandemic also affected rents. Daryl Fairweather, Chief Economist at Redfin, said: Newsweek “It was very soft because people were leaving New York City during the pandemic, but now everyone is back,” said the New York City rent market. Therefore, the market has been readjusted to make up for the “lost time”.

However, the rent did not fall during the pandemic. In Florida, for example, rents are steadily rising as a result of the continued outbreak of pandemics, according to Fairweather. She said Florida renters are also feeling the pain of inflation in addition to rising rents.

May, Rent went up According to Redfin, it was 24% in New York City since the same period last year. That number is even higher elsewhere, with rents jumping 48% year-over-year in Austin, Texas. Overall, Redfin found that the median monthly rent in the United States exceeded $ 2,000 for the first time in May 2022.

This price is mainly due to the lack of rental space. Nationally, 95.5% of rent was occupied in the first half of 2022, according to a June report by RentCafe. According to the same data, vacant apartments were filled within 35 days on average, with 14 lessors competing for each apartment on the market.

According to Fairweather, the hardest hits in the current housing and leasing market are those believed to be in the middle-income and lower categories. High-income households, on the other hand, do not experience a recession due to housing pressures exacerbated by high levels of inflation.

“If you’re wealthy, you don’t feel the effects of inflation. You’re probably already a homeowner trapped in low mortgage payments. You’re feeling less of the current changes in the home market. No, “she said. “For those who have already paid, another rent will go up. They are the ones who are most hurt.”

Fairweather added that after the Federal Reserve raised interest rates, housing supplies have improved somewhat in recent weeks and fewer people are buying homes.

Fairweather said some homeowners could benefit from injuring the lessor. She said homeowners who were trying to sell their homes might find financial rewards from renting their homes for a higher price.

“It was a good investment strategy … people are definitely benefiting from this housing market environment,” she said, adding that such a scenario could “reduce renters’ inventories.”

She went on to say, “It looks like we’re past the peak of rent growth. Rents are still rising, but not as much as two months ago. This is kind of good news in terms of rounding the hump of inflation. But basically, just because there is a shortage of housing, I think rents will continue to rise in the long run. “

Fairweather said housing isn’t being built fast enough to keep up with demand, leaving less optimal conditions for the rental and housing markets.

“We have a big hole to dig into ourselves,” she said.

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