Are Investors and Interest Rates Abolishing the Dream of Homeownership?

Mar 6, 2024

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Soaring U.S. rental prices have prompted discussions about the nation's trajectory towards a renter-centric society.

From the exorbitant rental prices in Miami to the ongoing wisdom that homeownership is an advantageous financial decision, as renters and homeowners search for affordability and stability, they will need to navigate an increasingly complex market.

With rental costs experiencing a staggering 30% increase over a three-year period, this episode of Core Conversations examines various factors contributing to this phenomenon, including a severe shortage of rental properties, heightened demand from new households, and the impact of high mortgage rates on homeownership rates.

As Americans search for solutions to growing rental prices, build-to-rent communities have stepped into this dynamic. These developments offer solutions to the rental supply crisis but also raise questions about the long-term impact of these communities on local economies and housing market dynamics.

In this episode, host Maiclaire Bolton Smith and CoreLogic Principal Economist Molly Boesel discuss the complex interplay between economic factors, housing policies, and societal trends shaping the rental landscape in the United States.

In This Episode

2:29 – Why are rents so expensive? Is the lack of affordability transforming the U.S. into a land of renters?
7:38 – How does the recent 30% increase in rental prices compare to the long-term average? How do rent-controlled apartments skew the growth?
9:10 – Looking at regional rent affordability and what happened in Miami.
10:15 – How is the rental economy distributed between single-family and multifamily units? Is the build-to-rent economy further tipping the balance?
16:46 – Who is investing in these build-to-rent communities? Is it venture capitalism? Banks? Individual investors? And how are these communities impacting local economies?
17:39 – Erika Stanley goes over the numbers in the housing market.
18:39 – How are high rental prices correlated with the slowdown in homeownership rates?
19:48 – Why are first-time homebuyers still making up a large share of buyers despite high interest rates?
21:42 – Erika Stanley reviews global natural catastrophes and their effect on the insurance market.
23:00 – Are there advantages to being a renter versus a homeowner even in the current rental market?

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