The once-booming housing market has struggled for the last couple of years, weighed down by rising home prices, high interest rates, and low supply of new homes. Now, it appears those issues may spill over into the rental market. Some experts are predicting what they call an "apartment crunch" over the next couple of years, as demand for rentals rises while construction of new units slows down.
Rental costs that soared coming out of the pandemic have leveled off over the last two years, due to more properties coming on the market. But that trend could be about to change, with construction costs going up, and continued problems with the housing market. "We're actually seeing a cutback in our new construction (of rental units)," says Ted C. Jones, Houston-based real estate economist. "So I'm afraid if you're looking to rent---and most people are because home ownership is so expensive---our rents are just going to go up."
Jones tells KTRH that there are simply too many factors weighing down the housing market that can't be fixed quickly or easily. "Either prices drop 41 percent, that's not going to happen...incomes go up 69 percent, that's not going to happen...or interest rates have to drop into the three percent range, and that's not going to happen," he says. "So it's going to be difficult for people to own a house or rent a house in the coming years."
But the news isn't all bad. Houston is still among the most affordable rental markets in the country, and is one of the cities with the most new rental units built in recent years. "We are so blessed to live in Houston, both for renters and owners," says Jones. "Affordability is a lot better here than the rest of the country, both for housing that's owned and apartments."
Photo: iStockphoto