Rent prices are stagnating, suggesting high inflation may stick around
Half of people who have a full-time job and make up to $33/hour can’t afford a one-bedroom rental
Once-rapid declines in rental prices are stalling out, a sign that high inflation could be here to stay.
A new report published by Realtor.com shows that rents declined for the 10th straight month in May, with asking prices down about $13, or 0.7%, compared with the same time last year.
However, that marks a slight increase from April. The median asking price in May was $1,732 – up about $10 compared with the previous month, suggesting that progress on rental costs is stagnating.
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A «for rent» sign is posted in front of a home on December 12, 2023 in Miami, Florida. (Joe Raedle/Getty Images / Getty Images)
In fact, the median rent was just $24 less than the peak seen in August 2022, according to the report. Notably, asking prices are still $306 higher than the same time in 2019, before the pandemic began.
Rent has been driving inflation for months as pandemic lockdowns, pent-up demand and record-high housing prices sent costs soaring. The slowdown in progress indicates that «inflation may continue,» according to Realtor.com.
«This deceleration trend could hinder further improvements in the overall rate of inflation and add long-term uncertainties, underscoring the consistent need for additional housing construction to alleviate the supply shortage that is contributing to higher costs,» the report said.
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High rents are a concerning development because more expensive housing costs most directly and acutely affect household budgets. Roughly 34% of households are renters, according to Census Bureau
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