Posted on 02/21/2022 6:09:44 AM PST by Mr. Mojo
Rents have exploded across the country, causing many to dig deep into their savings, downsize to subpar units or fall behind on payments and risk eviction now that a federal moratorium has ended.
In the 50 largest U.S. metro areas, median rent rose an astounding 19.3% from December 2020 to December 2021, according to a Realtor.com analysis of properties with two or fewer bedrooms. And nowhere was the jump bigger than in the Miami metro area, where the median rent exploded to $2,850, 49.8% higher than the previous year.
Other cities across Florida — Tampa, Orlando and Jacksonville — and the Sun Belt destinations of San Diego, Las Vegas, Austin, Texas, and Memphis, Tennessee, all saw spikes of more than 25% during that time period.
Rising rents are an increasing driver of high inflation that has become one of the nation’s top economic problems. Labor Department data, which covers existing rents as well as new listings, shows much smaller increases, but these are also picking up. Rental costs rose 0.5% in January from December, the Labor Department said last week. That may seem small, but it was the biggest increase in 20 years, and will likely accelerate.
Economists worry about the impact of rent increases on inflation because the big jumps in new leases feed into the U.S. consumer price index, which is used to measure inflation.
Inflation jumped 7.5% in January from a year earlier, the biggest increase in four decades. While many economists expect that to decrease as pandemic-disrupted supply chains unravel, rising rents could keep inflation high through the end of the year since housing costs make up one-third of the consumer price index.
(Excerpt) Read more at yahoo.com ...
Being able to leave and go to another city for work is convenient, and a must in this economy or simply calling the land lord to come fix anything broken.
There are many pros and cons for 'owning' a home or mortgage and renting as well.
None of your actions will matter, unfortunately, when the real trouble and draconian confiscations begin
Mine too! Yes, when I was knee-high. They also drummed it into me that being a landlord was for suckers. Listening to them quickly brought me to a very comfortable financial position.
When I have kids and they ask me for advice I will start by telling them to listen to the grandparents. :)
Yeah not having the “will power” to save for a down payment is one of the silliest things I’ve ever read. :)
I don’t see a problem for the government here. Just take rent out of the core inflation calculation. Problem fixed! See how easy it is?
Hundreds of thousands of new homes are slated to be completed this summer. I think this will ease this a bit.
The major cause driving rental prices in many of these markets are not small rental investors. It is large corporations like Blackrock. Also, smaller REITs like Fundrise.
These companies buy/build apartment complexes. They are also buying multifamily homes in many markets. In some markets they are buying single family homes and renting them out.
They come in with ALL cash offers that make it very difficult for small investors to get into rental properties.
For all that do not know, an investment property requires 25% down payment. So, in many markets to purchase a 2-3 unit apartment building you have to put down $125K or more. It is a long term investment. The ROI on some of some of the local properties in my market is now under 10%.
We just had this conversation yesterday. Friend and his wife showed up to show us the brand new car they had just bought. Neither of them make much money and they already had one car payment. They’re renting a room from his sister. After we figured out how much 2 cars plus insurance plus the room they’re renting costs them….add in groceries….they have almost $0 discretionary income left. What is wrong with people?…
Yep. That’s what my wife and I did for the 2008 election. We bought 12 acres in South Central Kentucky, and actually moved there from Seattle in 2011. We then bought the 20 acres next door. Finally, we paid it all off and got all the revolving credit to zero and our cost of living now is in the $1,200 a month area. And if we really need some money, we just sell a few trees.
“being a landlord was for suckers”
Yeah it’s certainly not for everyone...I’ve heard enough horror stories about renters to scare me off.
If I was a landlord I’d probably be laying awake all night staring at the ceiling in a flop sweat imagining broken sinks, toilets and urine and excrement smeared walls....because that’s one of the horror stories I’ve heard from a friend that had a rental......no thanks.
This is going to mean a lot of more problems. Just wow. People did NOT vote for this administration and now the administration is wrecking the country. The depth of evil involved here is profound.
You're right... people aren't packing up to move to democrat hellholes...
Actually many people do not have the ability to care for ahome.
What is wrong with people?…
**********
Over time society has changed. However one thing remains the
same for society.
Food. It’s a necessity that is ever present in the life of the
living. History shows various forms or methods of the food
chain. Today machinery is one vital step that has reduced the
human element. Preservation methods have improved/changed
thus food last longer once processed.
There are always hundreds of thousands of homes slated to be completed.
The problem is that for about ten years from 2008-2018 we UNDER BUILT based on normal requirements for a country of 330 million +/-.
Most housing industry economists state we need to build 1.5 million housing units/year to keep up with population growth.
Houses(single family & apartments/condos) on average on last 75 years. They burn down(CO), get flooded(hurricanes), and are demolished(Detroit), for one reason of another.
We do not build houses out of stone like they did in Europe where there are residences over 400 years old.
The oldest houses in the US are about 300 years old. Those have been rebuilt multiple times.
The inventory of homes for sale is extremely low. Especially in the areas where everyone wants to move to(SC, FL, NC, AZ, ID, TN, TX, CO, WA).
Properties in states like NY are becoming a discount to other states now. For example, my wife sent me a listing last week for a 180 acre farm in Alleghany county in NYS for $599K.
All real estate is local.
People did NOT vote for this administration and now the administration is wrecking the country.
*********
Some people DID and some people DIDN’T.
Simple solution for the liars in the Federal Government... simply drop this metric from inflation calculations!
Problem: SOLVED!
FYI, there are management companies that will take care of all that for you. They get the call when the toilet is broke or the furnace is not working. They also qualify all the potential renters. For doing this you give them the first months rent and a percentage every month. They collect the rent and send you a check every month.
When I moved to Brentwood (Los Angeles) in the 90s, my rent was 750.00/month. I moved a few times in the same building but the highest was 850.00/month for a 1 bed/1 bath when I left in 2005. The apartments are now going for well over 3K/month.
I never heard the term BTR Build-to-rent before this year. I thought investors bought homes. I had no clue the current trend is to simply build your own complete subdivision of rental SFH.
That is competing with sales inventory in a time when supply chains shortages are slowing down home building, often by months and months.
Meanwhile, they are not building anything small at the low end for entry level buyers. It is really hard to get into your first home today. Move up buyers will hit a wall when interest rates go to 5%.
Oh, they have plenty of equity in their homes, but a lot of people are going to look at their current home payment at 3% on a $200,000 loan. Then when they see what it will cost to service a $400,000 loan at 5%, they are just going to stay put and pay that cheap mortgage, freezing up housing even more.
A lot of us are going to be renting for the foreseeable future.
We are being pushed into a nation of renters.
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