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Rents on the rise-
Since January 2021, the national median rent has increased by a staggering 13.8 percent. San Francisco was significantly affected during a pandemic. Rents are still 12 percent lower than they were in March 2020, but the city has seen prices increase by 20 percent since January of this year. And in mid-sized markets rents rose throughout the pandemic for example rents in Boise, ID is now up 39 percent since March 2020. Rent growth in 2021 so far is outpacing pre-pandemic averages in 98 of the nation’s 100 largest cities.
Vacancies hitting historic lows-
There had been increased vacancies due to uncertainty of the pandemic last summer as there was household consolidation. This summer saw a post-pandemic reaction of increased demand. The total number of households in the U.S. is now greater than ever before at over 131 million.1
This high demand has created a tight market, resulting in our vacancy index dropping sharply throughout 2021 as prices increase rapidly. Rents are now up more than 13 percent this year, more than doubling the overall rate of inflation.
Single family housing impact-
With a 48 percent drop from last year, the For-Sale market is seeing a historic contraction of available inventory. This caused a squeeze in the market and significant price increases. The potential home buyers that are priced out of the market or waiting for things to cool down will continue to rent. This put further strain on the rental market.
The rental market outlook will remain strong as there continues to be limited supply. And investors will continue to see strong returns.