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Rental Affordability Issues Likely To Last Long-Term

According to the Realtor.com Monthly Rental Report [1], new data indicates that rental competition remained persistent in April, as the U.S. median rental price hit a new high —$1,827— for the 14th month in a row.

These trends highlight affordability struggles reported by renters in Realtor.com's recently published Avail Quarterly Landlord and Renter Survey [2], which found higher rents are increasingly cutting into households' budgets for regular expenses and savings.

examples of financial strains for renters in 2022 chart

"April data illustrates the perfect storm of supply and demand dynamics behind the continued rent surge, from a low number of available rentals to higher for-sale housing costs forcing many would-be buyers to rent for longer than planned," said Realtor.com Chief Economist Danielle Hale. "Renters are being left with few options but to meet higher rents and, in some cases, even offer above asking – whether they can afford to or not. Avail's new survey shows rents are not only maxing out renters' housing budgets but are the biggest strain on their overall finances, even as inflation drives up expenses across the board.”

April data from Realtor.com showed national rents maintained their record-breaking run that began in January 2021, despite posting a slightly smaller year-over-year gain than in March. The continued rent surge is attributed to the mismatch between rental supply and rising demand, largely from would-be homebuyers.

Some of these aspiring homeowners are staying in the rental market for longer than they may have intended, due to intensifying cost pressures driven by both the longstanding housing supply shortage and more recent inflationary economy. If these trends continue, national asking rents will likely surpass 2022's forecasted year-over-year growth projections (+7.1%) by end of year.

reasons landlords are increasing rent in 2022 graphic

With rental demand on the rise, landlords with limited available units are able to adjust asking rents on both new and renewing leases to reflect the increasingly competitive market.

In fact, the majority of landlords surveyed by Realtor.com's Avail reported plans to increase rental prices within the next 12 months. This could mean further rental affordability challenges, with many surveyed renters already feeling the squeeze on their finances and savings, as inflation drives up the cost of everything from rent to regular household expenses.

“For renters trying to stay on budget, making a list of must-have features is key and using a tool like the Realtor.com Rentals app can help you find (and stick to) your parameters,” said Hale. “This will be especially important as, if recent trends continue, we expect the typical U.S. asking rent to eclipse $2,000 by August."

"Our survey data underscores how renters and landlords alike are feeling the squeeze of inflation and higher costs. For renters in particular, many may understandably feel caught between a rock and a hard place, but remember that there are resources that can help. Doing your research can go a long way in helping you prepare to navigate rent increases and their impact on your family's finances," said Ryan Coon, Avail Co-Founder and VP of Rentals at Realtor.com.

To read the full report, including charts and methodology, click here [1].