U.S. apartment rents rise for 14 straight months
Inflation in the U.S. is at a record high, and rising prices are affecting all sectors of the market, including real estate. Apartment rents have been rising for 14 months, and many Americans are finding it increasingly difficult to pay for housing. In addition, rising rates are causing a divide between social strata, as homeowners are becoming more affluent compared to renters, who are finding it difficult to pay rent.
Buying your own home is also extremely expensive, and those who were previously going to buy property are now forced to rent it. This leads to an increase in demand for apartments, and as a consequence, rates are rising. According to Realtor.com, 75% of landlords registered on the site plan to increase rents during the year. Right now, the national average rental price is $1,827, and by winter it could reach $2,000 a month. Rates are up 17% from last year.
The largest increase in rental rates was recorded in Florida. In one of the resort towns here the cost is $3,045 per month. Compared to last year the price has increased by 50%. The central part of the state also saw intense growth in rates, up 32%. Apartments for rent here cost an average of $1,927 a month. Analysts note that such dynamics of rising prices were last recorded in 1991.
To meet the high demand, market participants increase the volume of construction. In April this year in the U.S. was put into service 612 thousand apartment buildings. This figure is 42.3% higher than the same period in 2021.
The proportion of renters is 35% of the total population in the United States. And their ratio across the country is uneven. For example, in major metropolitan areas – New York, Los Angeles, and others – there are fewer homeowners than renters. In most cases, apartments and houses are rented by young people who do not yet have enough money to buy their own property. However, 66 percent of renters have the highest monthly expenses for renting a home. Sixty-seven percent of those surveyed admitted that they are not able to save as much money this year as they were last year.
Experts hope that new construction will slow down the growth of rental prices and reduce the gap between supply and demand. However, this process will take a long time, as the pandemic has significantly slowed down the development of the construction market. Now it is necessary to build new houses intensively in order to cover the acute shortage.