Are Rent Prices Finally Going Down Now
Q: Are housing rent prices finally going down? Helen, Hoboken, NJ
A: The incredibly high rent price growth that occurred during the pandemic is slowing in many local real estate markets.
Normally, rent prices increase at a pace slightly higher than inflation. Between 2010 & the start of the pandemic, most local real estate markets saw rent price increases between 3-4% annually. During the pandemic, rent prices skyrocketed driven by inflation showing double digit annual increases in many local real estate markets.
Nevertheless, signs point to rent prices stabilizing particularly in local markets that saw the highest rent price increases during the pandemic due to many factors including temporary migration out of city centers.
One factor that is slowing rent price growth is that housing supply is growing due to more multifamily construction and the fact that many single-family homeowners are choosing to rent out their homes rather than sell. More housing supply normally moderates rent prices.
As with all things related to residential real estate, every local real estate market is different and rent price growth or decline depends on the specifics of each market driven primarily by local housing supply and demand. In many local real estate markets on the West Coast, rent prices are falling whereas rent prices continue to increase in many local real estate markets in the Northeast although at a slower pace than during the pandemic. Thanks for your question, Helen.
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