Rising rents are expected to be a driving force in inflation this year and have been an ongoing policy challenge for the Biden administration.
Kiara Age moved in less than a year ago and now it’s time to move again: Rent on her two-bedroom apartment in Henderson, Nev., is rising 23 percent to nearly $1,600 a month, making it impossibly out of reach for the single mother.
Age makes $15 an hour working from home as a medical biller while also caring for her 1-year-old son, because she can’t afford child care. By the time she pays rent — which takes up more than half of her salary — and buys groceries, there’s little left over.
“I am trying to figure out what I can do,” said Age, 32, who also has an 8-year-old daughter. “Rent is so high that I can’t afford anything.”
Rental prices across the country have been rising for months, but lately the increases have been sharper and more widespread, forcing millions of Americans to reassess their living situations.
Average rents rose 14 percent last year, to $1,877 a month, with cities like Austin, New York and Miami notching increases of as much as 40 percent, according to real estate firm Redfin. And Americans expect rents will continue to rise — by about 10 percentthis year — according to a report released this month by the Federal Reserve Bank of New York. At the same time, many local rent freezes and eviction moratoriums have already expired.
“Rents really shot up in the second half of 2021,” said Daryl Fairweather, chief economist at Redfin. “The pandemic was kind of a pause on the economy and now that things are reopening, inflation is picking up, rents are going up and people are realizing they don’t have as much disposable income as they might have thought they had.”
Higher rent prices are also expected to be a key driver of inflation in coming months. Housing costs make up a third of the U.S. consumer price index, which is calculated based on the going rate of home rentals. But economists say there is a lag of 9 to 12 months before rising rents show up in inflation measures. As a result, even if inflation were to subside for all other components of the consumer price index, rising rents alone could keep inflation levels elevated through the year, said Frank Nothaft, chief economist at real estate data firm CoreLogic.
Read more from the Washington Post here>>