Rent Prices Are Increasing Like Crazy, and Harvard Researchers Figured Out Why
Hint: It’s not all supply.
Published Jan 28, 2022 1:53 PM
All of the lucky renters who scored a deal during the height of the pandemic last year are being faced with a dilemma—rent increases and lease renewals are right around the corner. And according to the Joint Center for Housing Studies at Harvard University, prices have never been higher. The spikes are happening all over; The Wall Street Journal is seeing hikes in Tampa, Florida, and Phoenix as well as New York and Los Angeles. It isn’t all just the draws of hip neighborhood demands and lack of inventory—there are a number of factors driving the increases. The center’s 2022 Rental Housing Report goes in-depth on what is actually happening to the market, and we’ve broken it down for you, below.
Not Onward, but Upward
Now more than ever, those in wealthier income brackets are opting to rent instead of buy because of the amenities. Why move to a fixer-upper in the country when you have a doorman and an in-building gym in the city? With less turnover in luxury buildings, there are fewer empty units month after month.
Stuck in Place
Despite the great metropolitan exodus of spring 2020, in 2022 apartment vacancy rates in urban areas have never been lower. In fact, it’s the lowest it has been since the 1980s. Why? Property inventory isn’t increasing, and new units are being snatched up within days (sometimes hours) of being listed.
If you feel like the buying market is a bit out of control, you’re not the only one. According to the survey, the share of respondents who thought it was a good time to buy dropped from 61 percent in June 2020 to just 28 percent in July 2021. So even if they’re ready, people would rather renew their leases than deal with finding their forever home right now—and we see their point.