Why Rent Is Rising In The U.S.

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Fresh numbers from the fall of 2021 suggest that rents will increase at a rapid pace in the coming years. That’s a problem for Americans; many spend 30% or more of their income on rent. A decade-long slowdown in house building is coming to a close, which could help renters. But the new developments in construction are generally for high-end and luxury apartment units. Experts say the market conditions are pushing people further away from their jobs and weighing on the economy writ large.

Market indicators suggest that rent hikes are coming in 2022.

Average rents for a one-bedroom apartment in the booming suburbs of Phoenix, Arizona, have more than doubled year over year, according to data from Apartment Guide. Meanwhile, rents in Manhattan have reached fresh records as life returns to the cities, according to Zumper.

The problems aren’t confined to the usual suspects, however. Rents for single-family homes across the country jumped more than 9% on average in August 2021 from the prior year, according to a report from the analytics firm CoreLogic.

Rents are moving fastest in the buzzy enclaves across the South and West. For Maria Arredondo, a teacher based in Austin, Texas, a sudden rent hike of nearly $400 forced her to make a move.

“If I had signed the lease … it would be taking a lot of my savings. And so I decided to move to a new building, losing about 150 square feet,” she told CNBC.

Mark Zandi of Moody’s Analytics said the strains on the housing construction market were building well before the pandemic took hold in the states. “There’s a lot of evidence that the lack of housing closer to where the demand is and urban cores is having a meaningful negative consequence on long-term economic growth.“

Generous monetary and fiscal policies have juiced demand for goods and services coming out of the pandemic. All that extra money sloshing around the economy is bubbling up into the rent.

The fresh demand is giving investors a reason to jump into the market. Experts say that’s boosting desperately needed supply. But there’s a catch: The homes being built are priced into the high end of the market. As a result, the evidence suggests that renters will be paying more for shelter this decade.

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Why Rent Is Rising In The U.S.

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31 COMMENTS

  1. Patriotic rhetoric boasts that we're nation of freedom and capitalism while every local government in our country restricts freedom and capitalism from providing a basic necessity of life.

    Single family home mandates and housing density limitations are destroying the USA.

  2. Rent control is needed for sure. Otherwise landlords will charge what ever they want! How could you give someone the power to raise rents to what ever they wanted? Force people to move?

  8. I reall can’t comprehend why they won’t mention the fact that people simply can’t afford it. They keep saying lack of housing smh. Average person, young people, and hard manual labor is about $16.00 per hour.
    Monthly pay= $2150 after tax
    Lowest rent= $1500 a month.
    Do the math , how can someone survive with things like this. And if it’s a single parent with 1 or 2 children it’s just no hope SMFH what is going on? Why are things like this?

  14. I been gave up a long time ago. I just couch surf & sleep wherever i deem is safe & quiet. Fk renting an apartment. I keep all that money in my pocket.

  25. IT USED TO BE CALLED CAPITOLISM! ALTHOUGH THE DEMOCRATS WANT CONTROL AND SOCIALISM! SO GLAD I OWN NO APARTMENTS! THE GAME MONOPOLY WAS BASED ON OUR WAYS AND IT SHOULD BE CHANGED! YOU SHOULDN'T BE ABLE TO RAISE THE RENT! BECAUSE THE DEMOCRATS HAVE BEEN CHANGING THE RULES! FOR THEIR CONTROL OF THE CITIZENS!

  26. Biden has Printed millions of dollars since elected. Money printing devalues the US dollar (a fiat currency) and drives up prices. This is why we have inflation!! Inflation has driven up costs for houses as well as rents. There is your explanation.. Stop voting for WOKE radical left politicians!!

  31. When people can’t afford high rent, they need to move further out and pay lower rent. Being greedy and cheap is the problem, not the rent

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