Rising grocery and gas prices serve as constant reminders of inflation, but another creeping trend spells more trouble for people’s wallets and Democrats’ political fate: rising rents.
As the cost to rent a home is rising at the fastest clip in years, as landlords bounce back from their struggles earlier in the COVID-19 pandemic, President Biden, however, hardly mentioned the surge in rent prices in his address.
Biden did not devote time in his speech to elaborate on his administration’s plans for reducing the cost of housing.
Now, Americans on average when it comes to rental rates, expect rents to rise. Many economists expect Housing costs to loom large in inflation figures. Making the rent remains a big challenge for millions of Americans.
Just last month, rent continued to skyrocket to new record highs in Manhattan.
According to a June market analysis compiled by Douglas Elliman and Miller Samuel, the average rental price in Manhattan has surpassed $5,000 for the first time in the history of the Big Apple.
In Manhattan, the study calculated an average rent of $5,058 per month, which on its own would cost a city resident close to $61,000 per year. This amount represents a 29 percent increase over the average cost of $3,922 reported in June 2021 as well as a 1.7 percent month-over-month increase from the $4,975 average rent observed in May.
The data released by Elliman and Miller Samuel last month, Manhattan’s median rent surpassed $4,000 for the first time ever in May, increasing by 25.2 percent year over year from the norm of $3,195 in May of the previous year.
Median rent is the mid-point value of the total price samples. Average rent is the sum of all rents divided by the number of the sample size.
Rents were pushed higher, in part, by would-be home buyers who decided to put their search on hold and rent instead, said Jonathan Miller, president, and CEO of Miller Samuel.
“You have more people pivoting, they were on the margin to buy a home, but now with mortgage rates spiking, they are in the rental market,” said Miller. “The market is already tight. This makes it tighter.”
Those renters typically have more money to spend and often need a larger, more expensive family apartment, pushing the average higher.
“New leasing activity in Manhattan doesn’t peak until the end of the summer,” Miller continued “Barring a recession, we’re expecting a seasonal increase in demand, putting more upward pressure on rents.”
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Sources: Dailywire, Therealdeal, Nytimes