Rental Prices Surge As Would-Be Homeowners Are Shut Out of the Housing Market

Pricey Homes, Expensive Mortgages

Since March, the Federal Reserve has been hiking rates, causing mortgage costs to soar. At the same time, home prices remain sticky following their upward trajectory over the last few years. In this environment, many would-be home buyers find themselves priced out of the market and forced to rent instead.

As demand shifts from buying to renting a home, landlords are bumping up rents. The trend may continue into the foreseeable future. The Fed has indicated ongoing rate hikes will be necessary as it works to pull inflation back from its highest level in over 40 years.

Rental Prices Keep Rising

Data analytics firm CoreLogic reported rents for single-family homes have continually increased over the last 13 months, coming in 14% higher in April year-over-year. The analysis also showed rental homes are in short supply, which is also a factor in the escalating cost to rent. Invitation Homes (INVH), one of the nation’s largest owners of single-family rental homes, reported current occupancy at 98%.

A Moody’s Analytics report indicates the trend is creating hardship for many Americans. Their findings revealed the percentage of people spending more than 30% of their income on apartment rent has skyrocketed to 23% after being at 8% as recently as late 2019.


Market observers contend continued increases in rents can’t be sustained. Many renters are already financially stretched and facing cost increases for other necessities like gas and groceries. There may be a limit as to what they can spend on housing. This may leave them little choice but to reduce expenses by sharing housing with family or taking on roommates.

Should the Fed’s tight monetary policy tip the US into a recession, rent prices could also face downward pressure. In the meantime, those seeking housing may find themselves between a rock and a hard place.

Things are changing daily within the financial world. Sign up for the SoFi Daily Newsletter to get the latest news updates in your inbox every weekday.

Sign up

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

TLS 1.2 Encrypted
Equal Housing Lender