Many Are Being Pushed Out Of The Housing Market. The Rental Landscape Offers Little Relief.
The pain inflicted by inflation is most intense when it impacts non-discretionary expenses. When prices rise in this category, consumers are often left with few cost-cutting options. Last week’s Bureau of Labor Statistics inflation report revealed ongoing price increases in the cost of food and housing. And while fuel costs were down in July month-over-month, gas has spiked 44% for the year. While some Americans are finding ways to diminish inflation’s impact on their wallets such as buying groceries at discounters or limiting driving, it’s considerably more difficult to adjust the cost of housing.
Amid rising mortgage rates and sky-high list prices some people shelved plans to buy a house. Unfortunately, the rental market offers little relief.
Rents are skyrocketing amid high demand and limited supply. The median national asking price was about $800 per month in 2016. That’s shot up to over $1,300 as of June this year. The average rent is up 23% since 2019. The price escalation is widespread, especially as employees have become untethered from their job’s location given the pandemic’s remote work push. Plus, as rents rise and more would-be homebuyers look at rentals, luxury units support even higher prices. Some landlords are renovating and charging more for upgraded units, further restricting supply.
It’s an incredibly dire situation for people with lower income, some of whom face the risk of homelessness with these increasing housing costs. For others, the financial burden is significant enough to prompt major changes.
Renters may feel pressured to accept higher rents given they obviously need a place to live. However, there are ways to influence pricing.
A face-to-face conversation may prompt the landlord to see you as a person, rather than just an income line-item. Speak to the landlord’s self-interest: turning over an apartment is costly and finding good tenants can be tough. Offering to sign a longer-term lease is one way to highlight the benefit of keeping you on as a tenant. A guarantee of reliable income may be a worthwhile tradeoff for the owner. A successful negotiation can also have long-term rewards as the next time the landlord raises your rent, it will be on a lower base.
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