According to economists, rental prices will be rising in the next year. Although buying a house is an eventual goal, young adults are comfortable living in a temporary for-rent home until life is figured out.
The demand for affordable apartments is increasing
With mortgage prices high, the demand for affordable apartments is increasing. As these demands increase, the price for rent goes up with it.
Construction efforts are decreasing drastically
There are a variety of different reasons that the market is in a slowdown. One crucial reason is that construction efforts are decreasing drastically. There are also housing shortages across the United States. The homes that are currently for sale have high mortgages that send house buyers running!
Housing bubble 2019: Lower mortgage rates but scared buyers
Although currently there are lower mortgage rates as opposed to a few years ago, there are also new tax laws that have scared potential buyers out of the market. A majority of those people scared away by mortgages and interests rates find themselves searching for a place to rent.
Rental vacancy rates are at an all-time low
Currently, rental vacancy rates are at an all-time low according to the Federal Reserve Bank of St Louis. While the number of vacancies certainly has its advantages, there are also large disadvantages that come with the territory. While the need for more apartments and houses for rent is growing, there aren’t enough apartments to meet the demand.
Heavy taxes on materials to build
In order to fulfill these needs, companies need to buy land, materials, resources, and labor. The issue of rental prices increasing lies with these four needs. The material to build new apartments and buildings for rent can be expensive because some materials are imported and may have heavy taxes. Labor is another issue that plays a role in raising the price of renting. In the last decade there has been a need for labor workers. However, there are not enough labor workers in construction fields to meet with the demands for new apartments.