PODCAST: Redfin's Chief Economist On Why The Nationwide Rent Spike Is 'So Intense'
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In the last few months, the rapid rise of rent has been back in the headlines as cities around the country experience yearly increases of as much as 40%.
In New York City, where rents plunged during the pandemic, the median rent hit nearly $3,400 a month in December, more than 20% up on the year before, and the highest rate ever recorded for that time of year.
Nationwide rents for listed apartments were up 14% in December, according to Redfin. The residential brokerage’s chief economist, Daryl Fairweather, said on this episode of Bisnow Reports that the money flowing through the economy — from stimulus funds and extra savings people put away during the pandemic — mixed with widespread interest in better and bigger homes are pushing up demand for all types of housing.
With millennials and members of Gen Z moving out of their parents' homes and away from roommates, there are more people in the market, and it is all happening after mortgage forbearance and eviction moratoriums have lifted. Fairweather said rising interest rates mean the rental market won’t slow down anytime soon, and the negative impact of these soaring rents is now a problem that everyone has to face.
“Before, I think, it was something that the middle class could kind of ignore; it wasn't their problem that there wasn't affordable housing for lower-income people,” she says on the podcast. "But now, middle-class people can't buy a home because they're being competed against by people coming with all-cash offers, multiple offers on a home selling for $50K above asking. It's just getting so intense that I think people are starting to understand the severity of the problem.”