US cities with the highest rent-to-price ratios | Houses

September 21, 2022

Montana Mortgages

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With the rapid rise in real estate and rental prices over the past two years, American households that do not currently own a home are facing a major affordability crisis.

The residential real estate market took off shortly after the start of the COVID-19 pandemic. Buoyed by rising savings, low interest rates and government stimulus programs and driven by a desire for more living space, buyers rushed into the market. Increased competition has sent home prices to record highs. But now, with interest rates rising in an attempt to cool the market and rising prices being the new normal, many potential buyers have been pushed aside.

This state of affairs has left more potential buyers in the rental market and, due to increased demand, rents have skyrocketed over the past year and a half. The early months of the COVID-19 pandemic in 2020 saw rents hold steady as eviction moratoriums and federal housing assistance programs were in place. But with the expiry of these programs and increased competition for rentals, rents have taken off: in 2021, the median rent increased by 17.6%, and the median rent increased again by 6.7% already in 2022. .

For homeowners and landlords with locked in costs, the current market has been a boon. Owners have earned about $6 trillion in equity during the pandemic. Landlords, especially large business owners, enjoy higher profit margins as they raise rents to reflect market conditions.