Rents fall in most U.S. metros since 2023, demand struggles to match supply
seekingalpha.com
seekingalpha.com
The article shows our rents are up 4 percent; nothing shows any indication of slowing.
The folks most likely to be priced out of housing by escalating costs - they are the same folks who don't have the stack of cash needed to move to a different market.
> The construction boom, nonetheless, has improved rent affordability, according to Realtor.com data.
And yes, I'm against communism partly because of that. It's an awful ideology.
I am not a fan of all the choices the USSR made, but you are mischaracterizing a society under siege by the capitalist west.
> Demand for housing also remains heavy because Soviet rents, heavily subsidized by the Government, are very low. A modest two‐room apartment will en for 6 to 8 rubles ($8 to $11.30) a month, including some utilities. A four‐room apartment wil rent for 14 to 16 rubles ($18.20 to $22.30). Apartments in more modern buildings cost more because of additional services.
https://www.nytimes.com/1974/11/11/archives/in-soviet-ingenu...
Sure, that's just a guideline, but it's presumably based on what is (or once was) reasonable and possible to expect.
Also I'm not sure rental rates in a country currently actively being invaded and regularly bombed is a good example.
From "Tragedy & Hope" by Carrol Quigley
I think he meant non-subsidized rents.
If that were ever true, people would chose to spend a higher percentage to get a nicer, bigger, or better located place.
Unlike many goods, there is practically no upper bound on what you can spend on housing. You can't buy a better phone for $3000, but you can continue to buy a better home up to $50 million (possibly more).
When people throw around the word shortage what they mean is "availability at a price I'm willing to pay." Same with labor shortages.
What we learned is that those voices are catastrophic for entire classes of people - like new families.
For the many scores of millions of us, it's "not more than I can possibly pay".
ref: lived thru the 400 applications per day per rental crisis in 2021.
So we will just have to see if prices continue to drop.
Yeah that's actually an incomplete and oversimplified statement. Some people think, "If you want something, just pay more". But that ignores short and long-run supply limits, price frictions, skill matching, and more. The correct Econ 101 version reads:
"A shortage exists when, at the going price, the quantity people want to buy is greater than the quantity suppliers are willing or able to provide—labor markets included."
You cannot expect imperfect markets (i.e. real world markets) to clear simply by raising or lowering prices. Real-world constraints exist.
A simple example is this: Chicago has plenty of cheap, vacant units in higher-crime pockets of the South Side, but few buyers will take them. Meanwhile, exurbs with good schools and low crime have limited inventory because zoning caps and NIMBY politics choke new construction. That mismatch -- ample supply where demand is weak and capped supply where demand is strong -- creates a local housing shortage even though the citywide vacancy rate looks high. Price alone can't clear the market because the constraint is about where units are, not how many exist.
"Just because home prices are coming down and there are more listings, doesn't mean that prices are affordable. So there's still a supply problem in cities like Austin," Turner said. "I think only 25 percent of Austinites can afford to purchase a home at the median home price."
1 - The median apartment this year may be different than the median apartment 3 years ago. Perhaps cheaper (or smaller) apartments and houses are coming up for rent. A more accurate measure would be comparing the prior rents to new rents for existing places.
2 - Median doesn't equal mean. The 50th percentile apartment may be cheaper, while the 25th (more applicable for housing affordability discussion) or 75th (more applicable to HN readers) may be higher.
3 - The median is still up 20% over pre-pandemic levels.
4 - To measure housing shortage we should check levels of homelessness based on economic reasons. (Much more complicated than median price)
There is plenty of housing, but in a capitalist market of supply versus demand, the loudest group are going to be those who want to live in the expensive housing but can't afford it.
The story shows 28/44 metro areas had decreasing rents last year, so 64%. That still means that the other 16 had rising rents.
My guess is that rents lag inflation quite a bit, so the (slight) decrease is basically reflecting the drop in inflation over the past couple years. So, yes rents dropped 1% last year but they’re up 20% over 5 years.
I do believe that the US has a significant shortage of housing that is high quality in city centers. Families don’t want to live in apartments in this country so they end up living 20+ miles from their work and spending a huge amount on transportation.
“I’m not seeing many first-time homebuyers right now,” said Nicole Stewart, a Redfin Premier real estate agent in Boise, ID. “Rental rates here are still more manageable than saving up for a down payment and mortgage. People are finding rentals that are nicer than the house they could afford at the same monthly cost. That’s in part because a lot of home sellers are overpricing their properties as they struggle to adjust to the changing housing market.”
> The typical U.S. homebuyer needs to earn over $50,000 more than the typical renter to afford monthly housing payments, and the gap has been widening due to high home prices and mortgages rates.
I’ve heard that buying a house is being “long” on the local labor market. What this is suggesting is that labor markets (i.e. salaries) in general have not kept pace with inflation and higher interest rates.