Rent prices have steadily risen for as long as we can remember. But, few of us would have ever expected the unimaginable rent hikes of 2020-2022. With major metros seeing double-digit year-over-year rent percentage bumps, residents were forced to throw a larger chunk of their income toward housing. Now, with higher rent prices than ever before, America has become “rent-burdened,” and a dangerous threshold has been crossed.
What’s causing this rise in rents? Are investors to blame? And what’s a solution that could benefit builders, buyers, and renters? We’ve got Lu Chen and Thomas LaSalvia from Moody’s Commercial Real Estate division to give us their findings. Lu and Thomas’s team have been tracking rent prices carefully, logging which cities have seen the most significant price increases, which are becoming increasingly unaffordable, and what can be done about the problem. With a lack of housing supply and inflation eating away Americans’ income, what can everyday investors like us do?
Thankfully, there is a solution to this problem that could help curb unaffordability while presenting a profit for investors. Lu and Thomas go over exactly what would have to happen to return to a normalized, affordable housing market and what’s hurting our efforts to get there. Plus, with rents becoming unaffordable for many young Americans, our Dave duo asks, “Is real estate still safe to invest in?” All that and more in this edition of BiggerNews!
In This Episode We Cover
America’s “rent-burdened” status and why prices have crossed a critical threshold
Real estate markets that have seen the largest increase in rent over the past three years
Luxury housing and how its development is hurting the effort to increase affordable housing
Whether or not investors are to blame for rents skyrocketing
“Inclusionary housing” and how investors can fill the affordable housing need while making a profit
Whether or not real estate is still safe if renters get priced out of the market
And So Much More!
Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-775
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