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5 Trends That Will Shape the Future of Apartment Rentals

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The real estate market has been a huge point of conversation for the last two years, with higher living costs and supply chain issues due to COVID-19 causing issues for developers, landlords, and tenants. With many concerns as to the future of apartment rentals, and even a controversial eviction moratorium, the real estate market has taken a hit. Things seem to be turning around in 2022, however, so read on below for five trends that will shape the future of apartment rentals this year.

Higher-income households renting

In the past, most renters have been low-income families or young people just getting started with life. Over the last few years, however, the amount of high-income renters has skyrocketed. There are over 10 million renter households that make over $75,000 a year, as tough economic times and rising real estate prices have made buying a home difficult for even those with a substantial income.

Rising prices

As the COVID-19 pandemic seems to persist but society seems to stay open, rental prices are rising again. This trend is particularly evident among short-term rentals but has affected the long-term rental market as well. The average monthly rent in the U.S. in 2021 was $1,164, an increase of over $200 from where it was just five years previously.

Construction costs are still up

Part of the reason behind rising rental prices is the ever-increasing cost of construction. The cost of lumber and other building materials is at an all-time high, and many things cost over twice what they cost in 2020.

This shift is making it difficult and uneconomical for developers to build new construction, so to maximize revenue, many landlords and rental companies are simply raising the rent on old units. These construction costs may level out again once the COVID-19 pandemic has passed, but due to significant inflation over the last few years, prices may never go back to where they were.

Buying vs. renting

With both construction costs and average rent on the rise, many American households are faced with the difficult decision of whether to buy a home or rent. It used to be far more common to rent for a while to save money for a down payment on a home, but if average rent continues to trend upward, it will be very hard for households to get ahead and save enough money to purchase a property.

Transition out of the city

Over the last two years, there’s been a shift in the number of single-family vs multi-family rentals. Single-family houses in the suburbs and rural areas are becoming a more and more popular option. Part of this trend may be due to the mass transition to remote work that is allowing many people to move away from big cities.

Whether single-family rentals, small multi-family properties, or large apartment complexes, the market for apartment rentals has largely moved away from the city. With this change, the average rent price in the suburbs and the country continues to rise.

The post 5 Trends That Will Shape the Future of Apartment Rentals appeared first on My First Apartment.


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