Keeping up with trends in the rental market isn’t easy, and predicting them is harder still. Even so, 2022 has been a year that’s taken even some of the most seasoned experts by surprise. Higher interest rates, softening home sales, and skyrocketing rents are a few of the factors that recently led the New York Times to ask: “What’s Up With the Crazy Housing Market?” All things considered, that’s a fair question.
As we head into the back half of 2022, you’re not alone if you’re wondering what the remainder of the year has in store for rental properties. These are our best predictions for rental property trends in the fall of 2022.
Rental Property Trends for Fall 2022
Fewer buyers, more renters
The Federal Reserve hiked up interest rates in 2022 to combat inflation. But with higher interest rates, a lot of prospective home buyers have understandably decided that now is not the best time to buy.
Going into fall, we expect this trend to continue. As buyers wait for interest rates to come down and the housing market to turn in their favor, many of them will continue to rent. This will lead to an increasingly competitive rental market.
Increased demand, higher rent
When demand for rentals increases, prices also increase. We’ve all seen headlines about record high rents in many cities in 2022, and basic supply and demand is one of the driving factors behind it. As more people choose to rent, inventory remains tight.
But that’s only part of the story. Another major trend in 2022 is that many landlords are raising rent to recoup losses they suffered during the pandemic now that moratoriums on evictions and rent increases have ended.
Some signs of slowing
Although rents continue to rise, it would seem that the rental market isn’t quite the runaway train it was in 2021. In most cities, the rate at which rental prices are increasing has slowed down over the summer. That stabilization should continue into the fall.
Of course, the key phrase is in most cities. Rental prices in Seattle and Bellingham have continued to grow at a rate above the national average in 2022. The places with the greatest increase in rental prices so far this year have been Sun Belt cities like Miami, Orlando, Tampa, Las Vegas, Phoenix, Las Vegas, and Orange County, CA.
Demand for better and larger rentals
One might think that as demand for rental properties increases, most renters wouldn’t be as choosy as they might otherwise be. But the trend in 2022 seems to be just the opposite.
Younger Millennials and Gen-Z renters, who are making up an ever-larger share of the marketplace, are increasingly becoming more selective. Rentals that are more spacious, more modern, and offer better amenities have a real advantage, and landlords who have resisted updating older properties may be forced to either renovate or be left behind.
Back to the cities
The height of the pandemic saw an increased demand for rentals in the suburbs, as more and more people were working from home and had little need to be close to urban amenities. But as a large percentage of people have returned to their offices and other workplaces, demand is shifting back to city centers.
In 2022, renters are looking for living spaces that are close to where they work. Rentals near other amenities like bars, restaurants, gyms, grocery stores, and schools and have a significant advantage.
Contact us today to learn more about the fall 2022 rental market forecast. Our team of rental property management professionals is dedicated to helping you through these turbulent times.