New Multifamily Construction is Out of Reach for Most Renters
The Joint Center for Housing Studies reports that the increase in renter households outstrips production of new rental housing, but even so the new housing that is being produced is out of reach for most renter households. "...the rising costs of development pushed the median asking rent for newly constructed multifamily units up to approximately $1,290 per month as of 2013, an increase of $180 in real terms compared to 2012...."
The housing market is still broken six years after the "end" of the Great Recession". Fewer and fewer homeowners means the demand for rental units continues to outstrip supply. More demand for less supply means higher rents.
The housing "system" is constipated. People who want to buy can't afford a downpayment or qualify for a mortgage. The folks who could sell (especially overhoused baby boomers) don't want to take a loss on the "market" value of the property. There are too many renters chasing too few units--the definition of "inflation". In this case RENT INFLATION
The new Joint Center on Housing Studies proclaims it. Renters know that it's true. Still, look what happened last time the country created incentives for home ownership: the Great Recession!
PS: RHINO has argued that renting needs to take on some of the stability of ownership along with the advantage of mobility in a 21st century economy. We won't know what that new model will involve until the current constipated market gets regular again.
