Joshua Clark, a senior economist at Zillow, said he is baffled by how quickly rents have risen: “There was a warming, but the fact that we’re on these numbers — I would have laughed at myself if I predicted that. “
The prognosis does not look good for tenants, both in the short and long term. Rising mortgage rates will push some buyers out of the sales market, putting more pressure on the rental market. And as rents rise, even fewer people will move. With no relief in sight for the inventory shortage, tenants have few options.
In New York City, Mr. Steinberg: “I don’t see enough taps. The best measure of a city with rental housing is: do they build tall buildings with many apartments? I don’t see many – it’s not enough.”
Economists predict that rents will continue to rise for the next two or three years, but not at the same pace. Push enough renters to the brink of affordability and they’ll double and triple, or exit a market in search of a cheaper one.
“The blazing pace we were at in 2021 is just not sustainable,” said Mr Popov. “We are already seeing tenants respond to this in terms of more searches with roommates.”
So what should tenants do? If you can extend your lease, even at a higher rent, chances are it will be cheaper than moving out. You might consider hiring roommates or looking at cheaper neighborhoods. But none of the options are pleasant, and no one has a crystal ball to predict what the future holds.
“The main X factor will be what happens in the rest of the economy,” Mr Popov said. “When we start to see major shifts in the economy, all bets are off and we are in a new world.”
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