Single-family home rents are skyrocketing

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Ask anyone who is trying to buy a house right now and you will hear that it is really difficult. This is partly due to a lack of inventory, but also to competitiveness. mortgage rates which fuel consumer demand and drive home prices up.

But it’s not just the homes available for purchase that have skyrocketing prices. Single-family home rental prices are also on the rise, and if this trend continues, this could pose a significant burden on many home budgets.

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Why have rental prices gone up?

Single-family home rents rose 5.3% in April 2021 compared to April last year, CoreLogic reported. This is the largest annual increase in almost 15 years.

Why are rental rates for individual houses increasing? This is, in part, likely due to increased demand.

During the pandemic, for many families, single-family homes have become more attractive than multi-family homes. Renting a single-family home gave people more room to move out. And over the past year, that has also meant you don’t have to share an elevator, laundry room, or other common space with other residents during a severe health crisis.

And, as mentioned above, home values ​​in general have gone up, so homeowners may face higher property taxes as a result. Thus, they may seek to pass these costs onto their tenants.

Let’s also remember that many homeowners have seen their income drop in the past year or more due to eviction ban this has been since the beginning of the pandemic. Landlords can raise rents to compensate for lost income.

Can You Afford The Rent Increase?

If you are renting a single-family home or are about to do so, it is important not to bother yourself. Generally, you shouldn’t spend more than 30% of your salary in your hands on your monthly rent.

There are several exceptions to this rule. If you live in an area where home and rent prices are always overpriced, such as New York, you may have to spend a higher percentage of your income on rent. But in cities like New York, you can also get away with not having a car, so lower travel costs can help offset higher housing costs.

But generally speaking, sticking to the 30% threshold is a smart idea. So if you are looking to rent a new single-family apartment, you can take the time to explore the options available. Or if you’re already renting a single-family home and the landlord notifies you of a rent increase, try abandoning. If you’ve been a reputable tenant for a long time, you can convince the landlord to keep the rent the same, or impose a more modest increase instead.

The housing market is pretty crazy today and many buyers are racking their brains by taking on mortgage they cannot afford. Do yourself a favor and don’t make the same mistake by renting a home that is far outside your financial comfort zone.

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