Rental and home prices expected to rise even more this year, forcing some to pack up and move
A mass exodus is driving people from expensive cities and it's causing people in other places to become priced-out.
Rent prices expected to rise even more this year, pricing people out of cities
Rent and home prices have seen major increases over the past year and in some places, they've hit record highs.
Rent and home prices have seen major increases over the past year and in some places, they've hit record highs.
The rising cost of living has caused people in some cities to move out, simply because they can't afford these increases.
Zillow economist Nicole Bachaud said people are moving from major cities in California, from New York City, and from Chicago into the sunbelt states for more affordable options. But this mass exodus from these places has started to drive rent up in what used to be more affordable cities.
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"For longtime residents, this is bad news if one is a renter. It’s essentially pricing people out of the market," National Association of Realtors economist Dr. Lawrence Yun said.
Cities with the highest increases in rent prices include Phoenix, Miami, and Tampa, which have all seen an increase on average of over 25 percent in the past year.
"Rents are definitely growing at a rate that’s putting a lot of pressure for budgets for renters and causing people to get stuck in this affordability problem right now," Bachaud said.
Home buying is also challenging in the current market, partly because there aren't enough homes for sale at the moment, Bachaud said.
Over the past year, the Case-Shiller U.S. National Home Price index has risen by 18.6 percent, the strongest year-long growth in the history of the series.
Home For Rent Sign in Front of Beautiful American Home (iStock / iStock)
"Inventory is going to be an issue for the next couple of years as we have so many people in the market," Bachaud said.
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In Tucson, Arizona, husband-wife realtors Eric and Nanci Freedberg have been working in real estate for more than a decade.
"Right now, the market is red-hot, it’s very good to be the seller," Nanci Freedberg told FOX Business.
But they're also seeing people in the city become priced out because of the rising cost of homes in the area.
SAN FRANCISCO, CALIFORNIA - JUNE 02: A "for rent" sign posted in front of an apartment building on June 02, 2021 in San Francisco, California. (Photo by Justin Sullivan/Getty Images / Getty Images)
"It's a hard time to be the buyer, and it's a weird experience compared to if you flash back to 2015, it was really good to be the buyer. People were dying for people to come in," Eric said.
The Freedbergs said that the affordable houses they show receive dozens of offers in just days and sell within a short time frame.
"In a lot of places, it costs more money even to rent than it is to own a mortgage," Bachaud said.