(NewsNation) — Bidding wars are popular when it comes to buying a home in hot markets. But now, renters are realizing the advertised rental rate for an apartment may not be enough to secure them a place to live.
The demand for rentals right now is high, according to data recorded by Real Page Market.
Rising mortgage rates, growing fears surrounding inflation and supply chain snags all contribute to the increasing rental demand.
The median rental price for the country is $2,002, according to a recent report from Redfin, which means half the country is paying more than $2,000 a month for rent. And that number continues to grow.
Adrian Savino, director of leasing and business development for Living New York joined NewsNation’s “Morning in America” on Tuesday to discuss why the rental market is seeing this increase in demand, and how renters end up paying more than originally advertised.
Savino explained that in March 2020, there was a mass exodus out of cities, most likely due to the pandemic. But now, everyone who left is starting to return.
“It’s kind of interesting … there’s been a boomerang effect. So you’re seeing a lot of people come back, demand is coming back into an undersupplied market. So because of that, you’re seeing prices push up,” Savino said.
Looking at StreetEasy’s Data Dashboard Tuesday morning, Savino saw the overall supply from May 2021, which consisted of about 55,000 rentals, drop drastically in 2022, to about 30,000 rentals. The supply had been cut nearly in half within the year.
“So with supply cut in half, you know, you’re seeing prices here (New York) average prices closer to $4,500. So, you know, compared to the national average, obviously, that’s a huge jump as well,” Savino said.
“The only segment of apartments that allow for bidding wars are market-rate apartments, so it might not trickle down as much as you’d think. But again, this is affecting everyone,” Savino said. “It’s kind of interesting to just look through the data and understand that, you know, this is happening across the board.”
There just aren’t enough apartments to rent to meet the demand.
