Rents Drop BIG! - Who's Playing w/ Numbers? Why? - Election Time?

Question

US Rents Just Tumbled The Most On Record As Economy Craters

What about the actual state of rents? For the answer we go to the latest monthly report from Apartment List which we have used consistently since early 2021, and where we find something stunning: rents just tumbled by the most on record!

As the AL blog writes in its latest monthly note, "the national index fell by 0.7 percent over the course of October, marking the second straight month-over-month decline, and the largest single month dip in the history of our index, going back to 2017."

Mike Dymski · Answer

Send it to Jerome.  If they keep going, they are going to overtighten and it may get ugly.  Going to be difficult to solve a supply side (labor/oil/materials) problem with a demand side solution.  The labor force is already down ~7 million (of 160 million total) workers due to extra early retirees, millions extra on disability, extra deaths, and no immigration for 1-2 years; so, companies have already taken unintended layoffs of 5%.

Bjorn Ahlblad · Answer

I guess I'm just not smart enough to see how raising interest rates benefits anyone other than banks and lenders. Everyone else pays. Which means it too is inflationary to increase something that does not need to be raised. When oil companies etc do that we call it usury or greed. Don't ask me to explain the difference!

Nathan Gesner · Answer

Yawn.

Rents have increased by double digits for the last two years. Rents always decrease in the fall and increase in the spring/summer. All this shows is that they decreased slightly more than usual.

It's demand vs. supply. There's not a lot of supply out there. With rates increasing and high sales prices, more people are priced out of the market and can't afford to buy, thereby increasing demand for rentals.

The economy is in terrible shape and people may pull back on spending for rent, but I believe it will remain strong for years to come.

Kim Meredith Hampton · Answer

You had a market that was overinflated and had 0% interest rates! It’s like gambling. The light has been turned off and that a hard pill to swallow we everyone was on a very loooonnggg joy ride. Cheap money is gone, it’s over, as well as the rents. It’s a hard conversation I’ve had to have with investors, including myself!

JD Martin · Answer

Personally I don't find anything scary in this at all:

1. From their own data, rents always decrease in October.

2. There were 2 solid years of crazy increases. Where were rents supposed to go?

Account Closed · Answer

Higher rates also means much, much higher payments on the National Debt, and that is not good.

Rents Drop BIG! - Who's Playing w/ Numbers? Why? - Election Time?

Most Popular Reply