Key Reasons Why Rent Prices are So High and Might Keep Going Up – Yahoo Finance

Have you been victimized by soaring rent prices? If so, you’re not alone: Some cities have seen average rents increase by as much as 40%, indicating just how severe the rental crisis has become.

Like most economic phenomena, there’s no singular root cause behind the rental price surge. Instead, a confluence of factors is to blame, and some of those factors might surprise you.

Learn why rent prices are high. In the process, you might glean insights into how to stop living paycheck to paycheck and start cutting the cost of your living expenses.

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1. Rental demand is soaring as inventory remains low

At the height of the pandemic, millions of people under 30 weren’t able to leave the nest. Others who previously had moved out from their parents’ homes were forced to move back in with their families.

But now, those who can afford to are looking for a space of their own — and that’s in addition to the annual wave of young adults coming of age and searching for more independence.

Those two factors are putting further strain on a rental market already stressed by a low inventory of rentals.

Between current homeowners holding onto their properties and a new-construction shortfall, there simply aren’t enough rental units to keep up with demand. As people compete with one another for a relatively small number of rentals, prices increase.

2. Wealthier renters are relocating

Rising rent isn’t just a problem in hot markets, either. With the solidification of the work-from-home trend, people aren’t tied to one location like they used to be.

This has allowed wealthier earners to move out of hot housing markets and into more affordable places. When these relatively well-heeled renters reach their new cities, they are willing to pay more for the limited number of

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