Reality of Realty: Why Rent Prices Are So High (A Realtor’s Insight for Renters and Future Homeowners)

By: Valerie Davenport

[TRANSCRIPT]

Hey future homeowners, welcome back to my channel, Reality of Realty; I’m Valerie Davenport. And, as your trusted real estate guide, today we’re discussing why are rent prices so high and other factors that affect this.

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And,whether you’re moving across the nation or across the street, tap into my resources by emailing me today using the email in the description box below. Now let’s get into the video.

Hi everyone, welcome back to my channel! 

If you're renting right now, or maybe thinking about buying your first home, you've probably noticed that rent prices are through the roof. So today, we're going to tackle the big question on everyone's mind: Why are rent prices so high? As a realtor, I get this question all the time from both renters and potential homeowners. So, let's break it down and talk about what’s driving these costs and how this affects your decision to rent or own.

First up: High Demand, Low Supply. It’s simple economics. There are just more people looking for rental homes than there are available properties, and that’s creating major competition. Now, this shortage of rental properties comes from a few different things: 1) Population growth in cities and popular suburbs—there are more people than houses in these areas. 2) Homebuilding that slowed down big time after the last economic downturn, and we’re still playing catch up. And 3) with home prices going up, many renters are staying put longer instead of buying, which makes the rental market even tighter.

And speaking of Rising Home Prices, you’ve probably noticed the housing market's been pretty wild. Home prices have shot up in recent years, and with that, more people are getting priced out of homeownership. They’re staying in rentals longer, which again pushes up demand. 

And let’s not forget—landlords are adjusting their rent prices to keep up with the rising costs of owning property. Things like higher property taxes, insurance premiums, and even just basic maintenance are all factors that contribute to higher rents.

Now, let’s talk about Inflation and Economic Pressures. The cost of living has gone up across the board—groceries, gas, utilities—and yes, even rent. Landlords face higher costs too, and guess what? Those costs often get passed on to tenants. On top of that, rising interest rates make financing more expensive for property owners, which could lead to rent increases to help cover those additional costs.

Another key reason for rising rent prices is Rental Property Shortages. In some areas, long-term rental properties are being converted into short-term rentals, like vacation homes and Airbnb. And in other cases, large investment companies are buying up rental properties, which reduces the number of available homes for people looking to rent long-term. All of this just adds more pressure to an already tight market.

And let’s not forget about Urban Migration. With remote work becoming more common, a lot of people have been moving from expensive city centers to the suburbs or even rural areas. But, this has caused rent prices in suburban areas to shoot up as demand has soared. Plus, now that more people are moving back to cities post-pandemic, the urban rental market is heating up again, pushing those prices higher, too.

So, what does all of this mean for you—whether you're renting or thinking about buying a home? For renters, it can feel overwhelming trying to keep up with rising rents, but there are a few options that you can consider. One option is to try and lock in a longer-term lease to avoid sudden rent increases. That rhymes! Or, if you qualify, look into programs for affordable housing or rent assistance. If you're considering buying, now might be a good time to seriously explore that option. Even though rent is rising, owning a home allows you to build equity and potentially stabilize your monthly payments over time. Plus, there are first-time homebuyer programs, low-down-payment loans, and also some grants that could make homeownership more attainable than you think!

So, while rent prices might seem like they’re out of control, understanding the reasons behind these costs can help you make smarter decisions. Whether you're thinking about renting or buying, it's always a good idea to stay informed and plan for your future. If you have any questions, or you're ready to explore your options, don’t hesitate to reach out. I’d love to help guide you through the process! 

So that’s it for today’s video. I’ll wrap it up here by saying thanks for tuning in to the very end! If you found this info helpful, don't forget to like, share and subscribe, and hit that notification bell for more real estate insights. Until next time, happy house hunting!