Wondering if rental prices are rising in the US? Here’s everything you need to know about the rental property market in the country
Are rental prices rising in the US?
The short answer is yes! Contrary to the hope-filled perception of many Americans, the rental property market will continue to experience a hike in prices since the COVID-19 pandemic. The market is also growing in size and investment opportunity. And yet, renters continue to ask if the prices will drop anytime soon?
Are Rental Prices Rising in the US?
Now that the world is slowly starting to put the menacing threat of COVID-19 behind us, there is likely to be more demand for high-density rental apartments in major cities. It will likely happen to counter the rising rental prices of individual properties. NAR forecasts that house prices might moderate to 6.6% growth this year, but they are still not affordable for many US citizens. Moreover, the interest shown from prospective buyers is waning due to the unaffordability of the prices.
If the mortgage rates continue to rise in the rental property market, it will likely affect the sales. However, the housing market will continue to offer more opportunities for smart rental investors. Perhaps, the significant deciding factors in terms of buyer interest will be the rising interest rates, soaring inflation, volatility shocks, rising taxes, and housing regulations. These factors will naturally also impact builder interest.
Will the Rising Rental Prices Draw More Rental Investment?
The rising rental prices are a boon for landlords as the hikes might encourage more house and apartment investments. With that said, the new rental management challenges and the increasing expectations of tenants might discourage some prospective landlords from investing in real estate.
Given the progressing economic recovery, material and labor shortages, terminated eviction laws, and hiking property prices, the only prediction that has any merit is that rent prices will continue to rise across the US states. Moreover, the hike in rented properties will also encourage short-term renters to become long-term tenants as they wouldn’t want to risk searching for a new property in a thriving rental property market.
In such a climate, landlords should strive to learn better management strategies to ensure that they can keep their properties occupied by long-term tenants and build their business on a modern property management system to ensure the growth in their profits. They will also need to improve their tenant screening process to ensure that they only give their properties to tenants who can pay rent regularly.
The Bottom Line
Since the rental prices are expected to continue increasing, it’s perhaps the right time to find a property to rent for a long while so that you don’t have to look for a home down the road.