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  • Writer's pictureChloe Noh

Rent is finally dropping

Rent, which has risen by 20% on average over the past three years, is said to be falling in some areas. According to the Census, the average wage increase has only been 10%, so it must have been a big burden for those who rent.

Of course, most economists see rents still rising as a ratio of current supply and demand for homes. However, it is not rising in double digits like in previous years, and we are predicting that the upward trend will slow down a bit.

By the way, I'm in the Chicago area, so there are many people in the Chicago area who read my posts, but there is no downward trend in rent rates in the area where we are located. Rather, it is rising. The reason for this will be explained below.

Let's take a look at where rents have gone down.

As you can see in the map below, the Southern and SoCal regions, also known as the Sun Belt, experienced significant declines. Of course, it is said that it has shown a downward trend, but it is not a big drop compared to the rise in the past few years.

So, why have rental prices in this area gone down?

Experts say people who fled cities are returning as COVID ends. In other words, home work has been activated, and many people have moved to warmer places. However, after a few years, they are coming back to the big cities where there are more job opportunities. As a result, rental prices in the areas listed above decrease as demand decreases, while prices in large cities in the east and central regions increase as demand increases due to the moving demand.

Rising rents in large cities in the eastern and central regions will eventually stimulate the desire of potential buyers and turn into buyer demand. Then, there is a possibility that the ratio of demand and supply will change abnormally.

If you have any additional questions, please feel free to contact me.

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