Let’s Go Brandon: Largest U.S. Homeowner Raises Rents as Housing Crunch Persists

Invitation Homes is a nationwide home rental/lease agency.

Its most recent listing advertises thousands of homes in the South (e.g., Atlanta: 300+ homes), Midwest (Minneapolis: 40 homes), and West (Phoenix: 170+ homes).

Those are all single-family rental homes, and demand is off the charts — so much that new and renewed leases have gone up by 8% and 18%, respectively. Nationwide, single home rents have risen by over 9%. Leading the trend is Miami at 21%, Phoenix at 19%, and Las Vegas at 15%.

The current trend is for more living space and a scarcity of for-sale properties everywhere. That, in turn, is forcing qualified buyers back into the rental market, straining the availability and driving rental prices sky high. Rising rents in both single homes and apartments are motivating qualified buyers to the home-buying market to escape inflation.

New Construction Is Lagging

Complicating the housing shortage has been the slowdown in building new homes. The National Association of Realtors recently reported that too few homes have been built for the number of people who want them. In a June 2021 18-page report, the lobbying group addresses the problem in depth and urges “a once-in-a-generation response.”

The report acknowledges that replenishing the supply chain that was interrupted by the pandemic, surging prices and scarcity of everything in the builders’ kit bag will take time.

Playing catchup, according to Graison Dangor of Forbes Magazine, will require a full decade of a record pace in home construction. That pace would require a feverish 2.1 million new homes for the next ten years, more than the mid-2000 housing boom.

Mixed Prospects for New Home Building

Dangor reports good and bad news in residential construction. The federal government reported that permits for new construction fell 3%, but builders started on 3.6% more new homes. New home sales, according to a report by Market Watch, exceeded forecasts by 40,000, but pending home sales lagged into negative territory during September.

Buying a Home Versus Renting

So, is it smarter to own a home or to rent one?

The answer is complicated somewhat by rising rent costs, an inflated seller’s market, and the fact that home buyers pay far more per square foot than ever before.

For example, a 1,012 sq. ft. two bedroom, two bath single-family home currently advertises on Zillow for $358,900. Looking for more space will take the buyer into the half-million-dollar range. Well-heeled buyers are typically bidding well over the asking price in the hot Denver real estate market. This has crowded out new buyers, many of whom have postponed their search until 2022.

The long-term math, however, isn’t all that complicated. The bottom line is that, according to one contributor to the AreaVibes website, during a 30-year mortgage on a $225,000 home, with an interest rate of 3.05% and 10% down payment, the total cost would be slightly less than someone who rented the same.

The kicker is that monthly rental payments don’t stop and are likely to go up. On the other hand, the renter doesn’t pay property taxes, as well as repair and home maintenance costs. The tie-breaker is the rising equity and potential sale price for the homeowner.

Apartment Rentals Are Also Skyrocketing

The COVID-19 pandemic sucker-punched the apartment rental industry. Rental prices fell, and many renters were allowed to skip payments. While city dwellers sheltered in place or abandoned the crowds for suburban and rural safety, rent prices fell nearly everywhere.

In 2021, apartment prices began an upward trend. This thanks to the recovering post-pandemic economy of President Donald J. Trump.

America’s 110 million apartment renters have experienced rent increases at a median 11.4% compared to the 3.3% growth in pre-pandemic years. Those increases have occurred in 98 out of 100 of our largest cities. For example, renters in Boston have seen a whopping 23% increase, with San Francisco not far behind at 17%.

As young people move back to their jobs or move on in a burgeoning job market, they are tipping the balance of demand versus supply. Those rising rents will take about 30% of their monthly income, and observers don’t see rents dropping in the near future.

Aggravating the higher rent costs is the fact that wages, though rising, are not keeping pace with high rent and other living costs not to mention Biden-era growing inflation. The average rent for a small 841 sq. ft. apartment in Denver is just over $1,800. That’s over half the monthly paycheck for someone earning the median income of $43,770.

The economy is getting absolutely insane, and utterly chaotic.

Say it with me: LET’S GO BRANDON!


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2 thoughts on “Let’s Go Brandon: Largest U.S. Homeowner Raises Rents as Housing Crunch Persists”

  1. The only problems this country face, is sitting in the WH. A one man disaster area, finishing what his nigger Bama started.

  2. I believe many of these people are hoping to take advantage of the owners by not paying them their monthly payment. Biden calls it “rent relief”, and it’s still going on.

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