Ken worries about how high prices plus inflation are driving people, sometimes unwillingly into rental properties.
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Inflation and high-interest rates are pushing people into rentals, as the cost of owning a home becomes increasingly unaffordable. Rising prices for goods and services, coupled with higher interest rates on loans, are making it harder for people to make ends meet. As a result, many are turning to rentals as a more affordable and manageable option.
Inflation is one of the key drivers of rising rental demand. When prices for goods and services go up, people have less money to spend on other things, including their housing costs. This often leads to an increase in rental demand, as people look for ways to reduce their expenses. In addition, inflation can also lead to higher interest rates on loans, making it more expensive for people to buy a home. This combination of factors is making renting a more attractive option for many people.
Another factor pushing people into rentals is the current high-interest-rate environment. As interest rates on loans rise, the cost of borrowing money to purchase a home also increases. This means that people may be unable to afford the monthly mortgage payments, which can lead to defaults and foreclosures. As a result, more people are looking for rentals as a more affordable option, which has led to a surge in rental demand.
This shift towards rentals is not only affecting individuals, but also the market as a whole. The demand for rentals has led to an increase in rental prices, making it more profitable for investors to buy and rent out properties. In addition, developers are also starting to focus more on building rental properties rather than homes for sale, as the demand for rentals continues to grow.
Overall, inflation and high-interest rates are pushing people into rentals, as the cost of owning a home becomes increasingly unaffordable. This trend is likely to continue as economic conditions remain uncertain, and more people seek out affordable housing options. While this may be challenging for those looking to buy a home, it presents opportunities for investors and developers to meet the growing demand for rental properties.
The quality of life has been severely reduced …what has the 7,000,000 people that have crossed the border done to the demand and this pricing of rentals ???
And the people owned nothing, but were not happy. Wake up folks.
It really doesnt matter for thebavg joe whether interest rates are low or high. Ultimately the monthly mortgage would be higher in both cases.
You either give the seller more money or the bank more money.
Huge problem coming soon
never never going to be used to be
America is a big problem
Bullshit!! We have been trying to buy a home for 2 years and everytime our offers are declined or the houses are NOT what the seller's agent advertised. Combined we make over $110k both credit scores are above 800 and our dti is below 20%.
Inflation is out of control. El Erian and other brilliant economists say the rates need to be much higher to control the soaring food, gas, etc prices that are crushing the middle and lower classes. Not everyone is a rich RE Investor.
Layoffs are high and getting higher…. replacement jobs at fast food does not cut it.
When renters are all tapped out…. vacancy factor up up and away. Homeless everywhere…..section 8 may become the investors best friend.
I think Ken is overlooking how overvalued rentals are just like homes. In addition, there's a lot of apartment inventory that will be coming available this year. I've seen rental rates drop in my area and vacancy increase already.
People seem to think in a binary way. Either people buy or they must rent. That's not true. They can move in with a friend or family member. They can buy an RV. They might become homeless. If people can't afford to buy or rent a home or apartment something has to give.
People don't understand long term mortgage economics. Buying houses when money pours for 2 years is dumb because mortgages last 20 to 30 years.
What other option does the average Joe have? Buy overpriced homes? Please!