The average rent of a property surpassed $2,000 in the United States and rents are expected to remain high as more people wait to buy a home amid rising mortgage interest rates, according to a report by industry firm Redfin.
In addition to the fact that some people have put off buying a house or apartment, others have chosen to live alone, which has generated a kind of “war” over the few properties available for rent, explained Redfin.
“These are some of the pressures on the demand side that are keeping prices at the ceiling. While leasing is now more expensive, it is also more attractive to many people because mortgages have outpaced rents for many homes this year.”Taylor Marr, chief economist at Redfin, added in the report.
Marr estimated that the increase in rental costs will decrease in the coming months. But he warned that rents will remain high and complicate budgets for some tenants.
A ‘war’ in which many offer more money for rent
People from all four sides of the country told different media that in the midst of this ‘war for hire’ they had to offer more money than the owner asks to insure a home, and that in some cases this was not enough because someone else offered so much more.
That was the case for Brandon Schwedes in Port Orange, Florida. A few months ago, he had to move because the house he was renting was going to sell, he told NPR public radio. Already on a tight budget and above the $1,400 he was paying, Schwedes asked to rent another house for $1,750 a month. To his surprise, the realtor turned down his request because someone else offered $200 more for the house, a situation that was repeated in other cities.
“I’ve lived in the same area for 20 years. I know how much these houses were renting and how much they were selling for. But what’s happened in the last couple of years has been like a boom…destruction,” he told NPR.
This scam that Schwedes is talking about has especially put low-income people in a difficult position. According to the latest Redfin report, Nationwide rents increased by 15% per year in May and in some cities like Austin, Texas, they skyrocketed to nearly 50%, the biggest increase since they started keeping records in 2019.
In Nashville, Tennessee, Seattle, Washington and Cincinnati, Ohio, they are increasing by more than 30% a year, he added. In the Florida market, rents also continue to rise: in Miami, Fort Lauderdale and West Palm Beach they are up 29% a year.
And in New York and New Jersey, the same is true with annual increases of 24% in New York City, Nassau County and New Brunswick, New Jersey.