Why Are Rents Rising?
The pandemic saw many things including rock-bottom rent prices, but it seems like those days are over as rents soar back up to pre-pandemic levels and sometimes even higher. As the country pulls out of the pandemic, rents are up 10%+ in many areas.
Unfortunately, rent prices don’t come down often. The average rent price for a 2-bedroom apartment is anywhere from $1,400 – $1,900 and it is here to stay.
Why are rent prices so high?
Of course, everyone wants to know, why did rent prices increase so much? It comes down to supply and demand and it trickles down from the real estate industry. With higher sales prices for homes, millions of more people became renters that otherwise would have owned a home.
The higher demand for rentals drove up the rental prices because the industry couldn’t keep up with the demand. When demand exceeds supply, prices go up.
Will rent prices fall?
Since rent prices are excessively inflated because of the supply and demand, there is a chance we may see a decrease in the fall and winter months, but not such a significant decrease that it will change what most people can afford.
With demand for homes still high, rent demand will stay high too, making it a difficult decision for consumers choosing between renting or buying a home.
What are your options?
If you’re caught in the middle of the rent or buy decision, weigh your options. If you’re in a hurry to move because of a job, or you want to be in the new area before school starts, your options are more limited. You may need to make a fast decision, which may leave you renting.
But, you have options…
Rent to own – If you aren’t sure how long you want to rent or aren’t sure about buying in an area yet, consider a rent-to-own agreement. A portion of your rent payments will go toward your down payment if you exercise your right to buy the house during the contracted periods.
Rent temporarily – If you aren’t sure what to do, you can sign a one year lease and look at where you and the real estate industry are next year. A lot can change in 12 months.
Buy a house – If you don’t want to rent, there are ways to get a house you can afford in the area you want. You need the right team of professionals (REALTOR® and Lender) to help you get pre-approved for a home loan and find the home to bid the right price on.
Are rent prices increasing?
They are and there doesn’t seem to be time for them to slow down quite yet. Only time will tell as we work through the pandemic and see it through to the other side to find out what will happen. If you need to rent, lock in prices now before they increase again. But, if you’re thinking about buying, now is a great time and I can help you find the perfect home for you. Reach out and let’s talk about what you want in a home and I’ll help you achieve your homeownership dreams.