After asking rents shot up almost 20 percent last year, and will shot up an additional 7 percent in 2022, according to
Nationally, apartment occupancy was 97.1 percent in December, continuing a relentless demand for flats that has enabled landlords to raise rents dramatically over the last year, as we reported in “Rents Soaring: What’s Next?” (21 Sep 2021) and “Rents Soar as Investors Buy Properties and Raise Rates” (14 Sep 2021).
After flirting with insolvency during the COVID War, landlords will see an average boost of 13.5 percent in operating income this year, analysis service Green Street has forecast, beating gains by lodging, office, and retail properties.
With home prices at record highs, as we have reported in articles such as “Home Sale Rush” (16 Nov 2021), fewer people—especially Millennials and younger buyers of the age at which families traditionally buy their first homes—can qualify for a mortgage, put down 20 percent or more of the purchase price that many lenders demand, or compete in bidding wars or with all-cash buyers (“Frenzied Housing Market Becomes Even More Intense,” 22 Jun 2021).
Investors, especially private equity firms, have seen rising rents as a new profit center, investing billions to buy single-family homes in the most competitive real estate markets, as we have highlighted in articles such as “Invitation Homes to Buy $1 Billion Worth of Houses This Year” (1 Jun 2021) and “Private Equity Partners Target $5 Billion in Rental Houses” (27 Jul 2021).
The NAREIT Equity Apartments Index, which is tied to the performance of companies that own apartments, gained about 60 percent last year, more than double the Standard & Poor’s 500’s record, with some companies in the index skyrocketing by as much as 80 percent, The Wall Street Journal reported.
Nationally, wages rose an average of 3.7 percent in the 12 months ending 30 November, according to figures from the Federal Reserve Bank of Atlanta.
As professional investors snap up houses, often offering cash on the spot, fewer homes are available to individuals, especially those lacking lavish incomes.
First-time home buyers made up 29 percent of the market in 2021’s third quarter, compared to 33 percent during the same period in 2019.
Some analysts think that rising rents will deflate themselves; more people unable to pay the higher prices will give up their flats to move back with parents or pool with roommates, they warn, shrinking demand.
In many major urban hotspots, “minimum wages have been rising, but not enough to keep pace with the rent growth,” Danielle Hale, chief economist at, told the WSJ.
However, “we see people staying put,” Thomas Grimes Jr., chief operating officer of Mid-America Apartment Communities, which owns more than 100,000 rental units, said to the WSJ.
To meet the surging demand for flats, permits for new apartment construction will set records in 2023, Green Street predicted.
TREND FORECAST: Inflation, rising interest rates, and a shortage of buildable land will keep single-family homes out of the reach of vast numbers of younger families in the years ahead.
Instead, they will become a generation of renters, denied entry into the American Dream of home ownership and the opportunity to build wealth through equity.
That bleak future is being assured by private equity companies, which are snapping up more and more homes to rent out at premium prices to individuals and families who have few alternatives, as we have documented in articles such as “Invitation Homes to Buy $1 Billion Worth of Houses This Year” (1 Jun 2021) and “Private Equity Partners Target $5 Billion in Rental Houses” (27 Jul 2021).

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