Purchase prices are not the only thing rising in the real estate market these days. With a rise in prices of virtually everything due to inflationary pressures, rental prices across all big U.S. cities have also risen significantly. According to a recent analysis by Yardi, apartment rents were up in August from a year earlier in all the top 30 U.S. metro areas. This marks the first time since the start of the pandemic that prices were higher across all markets.
Earlier during the pandemic, a record number of Americans were moving out of the big cities and in particular, multi-family housing. This led to decreased demand for rental housing in these big cities and thus prices declined in many of these markets. With more Americans moving back into these big cities now, prices are adjusting accordingly. Most recently, the national average rent in multi-family buildings rose 10.3% from a year earlier to $1,539. For perspective, the average pace of growth has been 2% for the past 10 years.
A delayed return to the big cities
Although Americans are returning to the big cities, the rate of this happening is not at the levels that were originally predicted. In addition to many employers adopting remote working environments, the spread of the COVID-19 delta variant has also slowed this transition.
Interestingly, many developers have sought to build single-family homes to be offered as rentals. Due to the desire for additional space in an effort to social distance, this segment of the rental market has seen even bigger increases with prices up 13.9% from the prior year. Furthermore, this high demand for single-family rental homes has attracted even more institutional investors into the housing market as an additional asset class. Needless to say, this has made the home buying market even more competitive with many first-time home buyers being priced out.
With inflationary pressures and rental prices increasing accordingly, it is making it even more difficult for Americans to save enough money to purchase a first home. The South Florida market continues to be one of the hottest markets throughout the market. Of course, the lack of a state income tax is a silver lining for Florida residents as a whole. For current renters that desire to ultimately purchase a home, it is critical to devise and adhere to a sound financial plan. At Live South Florida Realty, Inc. we have assisted many first-time homebuyers devise a successful to achieve The American Dream!
At Live South Florida Realty, Inc. we have assisted many clients build their real estate investment portfolios. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. At Live South Florida Realty, Inc., we have been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!