Will tenants see easing and lower rent payments in 2022? Experts weigh

With rental prices soaring across the country, some tenants and potential tenants are finding themselves financially stressed due to tight inventory, significantly high rental costs, and multiple offers on less than ideal one-bedroom apartments.

If this sounds like you, well, you’re not alone.

Rents have exploded across the country, prompting many to delve into their savings and risk eviction after the federal moratorium expires.

But can renters see some relief in the coming months amid the ongoing COVID-19 pandemic? Will apartment prices finally drop?

Monthly rent payments are still high

Rental prices started rising last summer, and monthly payments remain high for renters, says Brian Carberry, an expert at leading national consumer resource Rent.com.

“It really boils down to supply and demand right now,” Carbery told FOX Television Stations Group. “Occupancy rates are at an all-time high at the moment, so there isn’t a lot of inventory available in the market for all those people looking for a place to live. That creates a lot of competition, so the owners are really able to price the units a bit higher than they used to. It usually is.”

A banner ad for apartments for rent is displayed in front of an apartment complex in San Francisco, California. (Image source: Justin Sullivan/Getty Images)

According to the US Census Bureau, rental vacancy rates during the fourth quarter of 2021 fell to 5.6%, the lowest level since 1984.

Related: Rents are reaching “crazy” levels across the country and there is no end in sight

“Without a lot of the rentals that landlords used to have, that gives them some price power because they’re not sitting on empty units that they need to fill,” said Danielle Hill, chief economist at Realtor.com.

Later, in the 50 largest metro areas in the United States, median rent rose 19.3% from December 2020 to December 2021, according to Realtor.com’s analysis of properties with two bedrooms or less.

Additionally, the Labor Department said last month, rental costs rose 0.5 percent in January from December. This may sound small, but it was the biggest increase in 20 years.

And as prices have risen, experts say it has forced many people, including those who were finally ready to move away from family and friends who stayed with them during the height of the pandemic, to reassess their living conditions.

“With prices so high, we’re also seeing a slight trend towards people coming back to live with roommates or reuniting families again, because they can’t afford to live on their own,” Carbery added.

Will rental prices continue to rise?

So, will rental prices continue to accelerate?

Carpri noted that prices historically rise during the summer months, but in general, prices should start to stabilize this year.

“I think rental prices will continue to rise, but I think the rate of increase will not be that sharp,” he continued.

Related: Will the real estate housing market collapse or calm down in 2022? Experts give their 2

Hill echoed that sentiment. It expects rents to continue rising in 2022, but at a slower pace thanks to increased construction.

She noted that “improving supply growth should help create more balance in the market,” predicting rents to rise 7.1% in 2022.

“I don’t think prices will come down any time soon, but I do think they will start to stabilize. Everything is relative, but it will look more comfortable for renters,” Carbery added.

Rising rents in the south

While rent prices continue to rise in major cities in the West and Northeast, experts say some of the highest price increases have been in the South.

And the jump was no bigger than in the Miami metro area, where median rent rose to $2,850 on December 21, up 49.8% from the previous year.

Other cities across Florida — Tampa, Orlando, and Jacksonville — and Sunbelt destinations in San Diego, Las Vegas, Austin, Texas and Memphis, Tennessee, saw increases of more than 25% during that time period.

In contrast, cities in the south where the cost of living is a bit lower, have also seen an increase in demand, causing prices to rise and putting more pressure on renters.

Effect of suspension of expulsion

Last July, the federal moratorium on evictions expired, paving the way for mass evictions at a time when a highly contagious surge of the COVID-19 virus was spreading across the United States, but in August the Centers for Disease Control and Prevention issued a new ruling. Banning evictions until October 3 in counties with high levels of coronavirus transmission in hopes of providing relief to some renters.

On January 25, by a 4-1 vote, the Los Angeles County Board of Supervisors adopted an extension, applicable to unincorporated areas and incorporated cities, and moratorium on eviction provisions through 2023.

Related: Experts say rental prices are rising rapidly across the US

And while the federal ban has been lifted, Carbery said we haven’t seen the full impact of stopping evictions yet, due to a backlog of eviction files in the courts.

“Some of those people at risk of eviction are not out of their homes yet, but that’s something we could see over the summer, over the next few months when these eviction files start,” Carbery continued, adding, “We could see a huge impact on the rental market, because you’re going to see More in the home market. Let’s say, landlords who haven’t been able to collect rent for the past year, may have to increase their rent a bit, because they need to make up for some of those lost costs.”

How to negotiate a rent

Experts say many factors are responsible for the astronomical rents, including a nationwide housing shortage, extremely low vacancies, and rising demand as young people continue to enter the crowded market.

With the number of homes for sale and rents dropping to a record low, this has caused many homes to remain renters.

But, if you’re stuck in the rental, Carbery said there are a few things you can do to find some relief.

If you are a good tenant who pays their bills on time and has been in your unit for an extended period of time, you may be in a position to negotiate the rent. The landlord may not want to deal with putting a rent on the market and waiting for another tenant to sign the lease, so you may be able to negotiate your monthly payment.

But, if you need to find a new rental, there are also a few things you can do to try and get the unit.

Carberry recommends offering to extend the lease to 24 months instead of 12 months, as an attractive offer to acquire the property. You could also consider looking for amenities already included in your rent payment. For example, if there is additional parking space that you don’t need, you may be able to give up that space for a lower rental payment.

“Some people might pay more, some might pay less, but there are deals out there. Just do your homework and research, and when you find something, don’t be afraid to act on it, because it is a ‘hot market right now,’” Carpre concluded.

The Associated Press contributed to this story.

%d bloggers like this: