LOS ANGELES - With rent prices skyrocketing across the country, some renters and prospective renters are finding themselves squeezed financially due to tight inventory, significantly high rental costs and multiple offers on less-than-ideal one-bedroom apartments.
If this sounds like you, well, you’re not alone.
Rentals have exploded across the nation, causing many to dig deep into their savings and risk eviction now that the federal moratorium has ended.
But could renters possibly see some relief in the coming months amid the ongoing COVID-19 pandemic? Will prices for apartments finally come down?
Monthly rental payments remain high
Brian Carberry, an expert with leading national consumer resource Rent.com, says rental prices started to skyrocket last summer, and monthly payments remain high for renters.
"It really boils down to supply and demand right now," Carberry told FOX Television Stations Group. "Occupancy rates are at an all-time high right now, so there’s just not a lot of available inventory on the market for all of these people that are looking for a place to live. That’s creating a lot of competition, so landlords are really able to price units a little bit higher than they normally would have."
A sign advertising apartments for rent is displayed in front of an apartment complex in San Francisco, California. (Credit: Justin Sullivan/Getty Images)
According to the U.S. Census Bureau, rental vacancy rates during the fourth quarter of 2021 fell to 5.6%, the lowest since 1984.
"Without a lot of rental vacancy that landlords are accustomed to having, that gives them some pricing power because they’re not sitting on empty units that they need to fill," said Danielle Hale, Realtor.com’s chief economist.
Subsequently, in the 50 largest U.S. metro areas, median rent rose an astounding 19.3 percent from December 2020 to December 2021, according to a Realtor.com analysis of properties with two or fewer bedrooms.
In addition, rental costs rose 0.5 percent in January from December, the Labor Department said last month. That may seem small, but it was the biggest increase in 20 years.
And with increased prices, experts say it has forced many people, including those who were finally ready to move away from family and friends they stayed with during the height of the pandemic, to reevaluate their living situations.
"With prices being so high, we’re also seeing a little bit of trend back toward people moving in with roommates or consolidating households again, because they just can’t afford to live by themselves," Carberry added.
Will rent prices continue to go up?
So, will rental prices continue to accelerate?
Carberry noted that prices historically increase the most during the summer months, but overall, prices should start to level off this year.
"I do think that rent prices are going to continue to go up, but I think that the rate of increase is not going to be as severe," he continued.
Hale echoed this sentiment. She expects rents to continue to rise in 2022, but at a slower pace, thanks to increased construction.
"Improving supply growth should help create more balance in the market," she noted, forecasting rents to rise 7.1 percent in 2022.
"I don't think prices are going to go down any time soon, but I think they are going to start to level off. Everything is relative, but it's going to seem a little more comfortable for renters," Carberry added.
Rental prices increase in South
While rental prices continue to remain highest in major cities in the West and Northeast, experts say some of the highest price increases have shown up in the South.
And nowhere was the jump bigger than in the Miami metro area, where the median rent exploded to $2,850 in Dec. 21, 49.8% higher than the previous year.
Other cities across Florida — Tampa, Orlando and Jacksonville — and the Sun Belt destinations of San Diego, Las Vegas, Austin, Texas, and Memphis, Tennessee, all saw spikes of more than 25% during that time period.
In return, cities in the South where the cost of living is slightly less, have seen an increase in demand, as well, causing prices to spike and put a further strain on renters.
Eviction moratorium impact
Last July, a federal moratorium on evictions expired, setting the stage for mass evictions at a time when an ultra-contagious mutation of the COVID-19 virus was spreading across the U.S. But in August, the Centers for Disease Control and Prevention issued a new ban on evictions through Oct. 3 in counties with high levels of coronavirus transmissions in hopes of providing relief for some renters.
On January 25, by a 4-1 vote, the Los Angeles County Board of Supervisors adopted an extension, applicable to the unincorporated areas and incorporated cities, eviction moratorium provisions into 2023.
And while the federal moratorium has lifted, Carberry said we haven’t seen the full impact of the eviction moratorium yet, due to a backlog of eviction filings in the courts.
"Some of these people who are at risk for eviction aren’t out of home yet, but it’s something we could see over the summer, over the next few months when these eviction filings do begin to take place," Carberry continued, adding, "We could see a major impact on the rental market, because you’re going to see even more on the market for homes. And landlords that weren’t able to collect rent over the last year, let’s say, may be forced to increase their rent a little bit, because they need to make up for some of these lost costs."
How to negotiate rent
Experts say many factors are responsible for astronomical rents, including the nationwide housing shortage, extremely low rental vacancies and unrelenting demand as young adults continue to enter the crowded market.
And with the number of homes for sale and rentals for rent being at a record low, it has caused many households to remain renters.
But, if you’re stuck renting, Carberry said there are some things you can do to find some relief.
If you’re considered a good tenant who pays their bills on time and has been at your unit for an increased length of time, you may be in the position to negotiate down your rent. A landlord may not want to deal with putting a rental on the market and waiting for another renter to sign a lease, so you may be able to negotiate your monthly payment.
But, if you need to find a new rental, there are also some things you can do to try and land the unit.
Carberry recommends offering to extend your lease to 24 months instead of 12, as an enticing offer to get the property. You may also consider looking at which amenities are actually included in your rent payment. For example, if there is an extra parking space that you don’t need, you may be able to give that space away in return for a smaller rental payment.
"Some people may pay more, some people may pay less, but there are deals out there. You just have to do your homework and look, and when you find something, don’t be afraid to act on it, because it is such a hot market right now," Carberry concluded.
The Associated Press contributed to this story.