Why Rents Are Rising Now
Q: Gerald, I am a landlord who has been having trouble collecting rent since the pandemic started. Are rents headed up or down? Earl, Plainfield, NJ
A: In July U.S. rents rose 7% for one bedroom apartments & rose almost 9% for 2 bedroom apartments year over year. As the economy improves, people are moving out of shared living situations seeking their own piece of terra firma. In addition, home prices have skyrocketed recently particularly in 2020 when the pandemic first hit and people were fleeing cities looking for more space. Eventually, as home prices climb, many home buyers, especially 1st time home buyers are priced out of the market, which is another reason rents are on the rise. Where residential rents ultimately stabilize is unclear, but at the end of the day, as is normally the case in real estate, it will boil down to supply and demand–rents rise when demand relative to supply rises. Thanks for your question, Earl.
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