Analysis | Home sales prices have soared over the last year, but rents are also surging. People priced out of buying need to rent, as do big cities returners and baby boomer downsizers.
Here’s why many US renters are screwed right now.
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In an attempt to curb the free fall, a record share of landlords slashed rent and offered concessions like months off rent and waived application fees to lure tenants back in.
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But these concessions — or vacancies — are harder to come by now.
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The frenzy, in part, is because of an overheated real-estate sales market.
Millions of Americans have tried to scoop up homes over the past year.
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Now, many Americans are being shut out because of:
🏠Record-low inventory.
📈Sky-high prices.
💰Intense bidding wars pushing those flush with cash to offer up to $1 million over asking prices.
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So the competition spills over to the rental market, making apartment hunting feel just as expensive as house hunting.
When home prices surge, rental prices often follow.
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And the demand for rentals is strong among:
💵 Gen Zers entering the market.
💻 Millennial workers choosing to rent in lower-cost cities.
🏡 Baby boomers downsizing homes.
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🔴 Rents in newly popular places are skyrocketing.
The reshuffling, fueled by the rise of remote work, brought new hot places to live, from midsize cities to beach retreats.
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Ritzy suburbs, where it's more common to own a luxe mansion, are seeing surges in rental interest too.
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🔴 Big-city returners are fighting over apartments.
While sales in midsize cities flourished amid the pandemic, markets in the country's biggest cities, like NYC, slowed.
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As the US recovers from the pandemic, many are pouring back into those coastal hubs, looking for COVID-crisis-level concessions and slashed rent prices — but not finding them.
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The chief operating officer of the brokerage @corcorangroup, Gary Malin, told Bloomberg that the New York rental market was the busiest he'd ever seen.
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🔴 Renting a house is also more expensive — and benefits Wall Street.
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This is good news for big investors, like Blackstone and Invitation Homes, that have been beating out everyday Americans in bidding wars to buy homes to rent at a profit.
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Hikes like these make the rental market even more unaffordable for Americans already struggling to pay rent.
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Subscribe to Insider and read more on the renting nightmare.
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