There is no denying that current rental costs are high. They’re getting close to record highs in some markets. The monthly budget is being severely strained for many Spokane Valley renters as a result of rent increases. Listed rents have increased by 15% nationwide and by as much as 30% in some cities. The pressure to rent grows as many buyers are priced out of the housing market by inflation and rising interest rates. So what’s fueling this trend? When will the cost of renting begin to decrease again? Here is a look at the current state of rental prices and the reasons why experts predict that they may start to decline soon.
Why is Rent So High?
Rent prices are presently rising as a result of several factors. These include the slow rate of new construction, the fierce competition in the residential real estate market, the lack of available rentals, and the lingering effects of the eviction moratorium enacted during the pandemic. Let’s examine each element in more detail.
Slow Pace of New Construction. The single-family housing market has been expanding for a while, but this development hasn’t resulted in the construction of many new apartment buildings. This is because building single-family residences or high-end apartments is much more advantageous for developers than building more affordable housing. As a result, there haven’t been enough new housing units to meet demand, which has made the rental market tight for years.
High Home Prices. The state of the home buying market is a further factor influencing rent increases. Prices in many markets have reached all-time highs after years of steady growth. Moreover, rising mortgage rates have made it more difficult for prospective buyers to afford a home. More people are consequently compelled to rent rather than buy, which raises prices even more.
Fewer Available Rentals. There are now fewer rentals on the market due to the high demand and constrained supply. According to a recent report by Apartment List, the number of available apartments nationwide has decreased by 20% since 2019. In certain markets, the quantity of available units has decreased even more.
The Eviction Moratorium. The eviction moratorium is the final variable that affects rental price increases. The moratorium executed last year to shield tenants during the pandemic has made it tougher for Spokane Valley property managers to evict non-paying tenants. Because of this, a lot of landlords are reluctant to rent to new tenants because they worry they won’t be able to make up their losses if the tenant doesn’t pay.
When Will Rent Start to Go Down?
You might be curious as to when rental prices will start to decline now that we’ve examined the factors increasing rental prices. Sadly, it’s difficult to know for sure. There are indications, though, that the rental market may be about to slow down. One is that sales of single-family homes are beginning to decline. This might result in more people remaining in their current residences as opposed to moving, which would reduce the demand for rental housing.
The fact that the building of new apartments is finally starting to pick up the pace is another indication that rents may begin to decline. Tax code changes that increase the profitability of renting out properties have contributed to this. The limited supply of rental properties should therefore be relieved, and prices should be kept in check, even though it might take a few years for these new units to become operational.
Therefore, there is some hope that relief may be approaching if you are struggling with high rent. To help you get by, however, be sure to plan your spending wisely and look around for discounts.
If you are looking for a better rental situation, contact Real Property Management Spokane County. We may be able to help you find a quality rental home you can afford. You can view our listings online.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.