If you were hoping the drastic rental prices from the Pandemic-era would last, you're gravely mistaken. In fact, the price of just about everything has gone up these days, from groceries to automobiles and, yes, home and apartment rental deals. Prices are skyrocketing, and renters are finding themselves in dire straits when it comes to affordable rental options. What's worse, it seems there's no end in sight. So, what's going on and what can you do about it?
It Started With the Housing Market
If you've noticed real estate prices, even during the pandemic, they were just kept on climbing and houses were getting snatched up at rapid rates largely because of the low interest rates from the Fed. Supply started to dwindle, and demand was at an all-time high. People were spending more time at home due to shutdowns, and they wanted more home or wanted to transition to a home.
The spillover from the dwindling supply made its way to the rental market, and then prices started to surge. The rate at which they climbed was the quickest in 30 years, and that's significant. Most renters expect rates to mostly go unchanged with only incremental increases. According to the statistics, the median apartment rent in America jumped a whopping 9.2% in the first half of this year. Most increases in the past have been about 2% or a little bit more in the first six months of the year, but 2021 has been a true anomaly.
Demand Will Continue to Rise, and Supply Will Dwindle
So, what does the rental market forecast look like? It's not good right now, of course. The nationwide median rental price stands at around 2% more than what prices would've been if the pandemic hadn't happened. That's not everywhere, mind you, but is commonplace in growing markets, as opposed to major metropolitan areas. Of course, in places like San Francisco, where rents are typically astronomical, even though increases have not been as bad as other locations.
The demand continues to surge with help from Millennials who are looking for rentals. The forecast shows that this will continue to cause a bigger rift between supply and demand, and that will likely continue over the next three years. The resultant rental inflation is here to stay for the foreseeable future, and that's bad news since people have to have somewhere to live.