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Home Rents Are Skyrocketing With No End In Sight!
The imbalance of supply and demand in the housing market and rising inflation have caused rents to rise significantly.
You’ve likely already heard that mortgage rates have been rising drastically starting in early 2022. If you were hoping to become a homeowner this year, rising mortgage rates and the insanely competitive housing market could have put your home-buying dreams on hold for the foreseeable future. But if you don’t own your home, you’re likely living in a rental property or apartment. And unfortunately, rents throughout the country have skyrocketed to what some are calling insane levels with no end in sight. This increase is caused by a shortage of available housing and increased inflation.
According to an analysis conducted by RedFin, US rents increased by 14% in December of 2021 and have continued to rise, raising the average rent to $1,877 a month. This is the biggest rent increase in more than two years, and of course, that number can be thousands of dollars higher depending on the property and where you want to live. For example, the average rent in Los Angeles is $2,524 per month for a 792 square foot apartment, but super desirable properties can cost more than $4,000 a month. In New York City, rents start at $2,000 to $3,000 per month for one-bedroom apartments depending on the complex and neighborhood. Rent increases significantly for more square footage and to live in the most desirable neighborhoods.
If you’re a landlord, this increase in rent may be good news for you because you can charge your tenants more money. But if you are a renter, this news could be disheartening. If you want to buy a home in the near future, renting sometimes feels like a catch 22. Mortgage payments frequently cost less per month than rent, but having to pay rent each month makes it difficult to save up a down payment to buy a home. In addition, landlords typically raise the rent each year when leases are renewed by anywhere from 3% to 8% depending on where you live. However, some renters who lucked out with pandemic pricing on their rental property could be hit with increases of up to 40% when it’s time to renew their lease. Some areas are rent-controlled while others are not, so these numbers could vary. In addition, landlords are usually required to provide you with ample notice. While your rental home could be affordable now, increased rent could cause your home to become unaffordable in the next few years.
As tenants, you don’t have a ton of options in this scenario aside from waiting for the real estate market to shit again. But this doesn’t mean you should give up all hope. While you might feel like the only solution is to move to a smaller property or to a less desirable area, you should first attempt to negotiate with your landlord. If you have a record of being a good and loyal tenant, your landlord may be willing to come to an agreement that’s more affordable for you. In addition, do lots of research to find out what your rights are as a tenant in your city or town. This will help you ensure that your landlord is not violating your rights as a tenant. For example, you want to be able to catch wind of things like unlawful rent increases and be able to defend yourself.
Learn more tips and tricks for buying or selling homes at the Dabl Real Estate Hub!