Mortgage rates have tripled yet home prices keep rising, forcing more people to rent instead of buy. When fewer people can afford homes, they stay in the rental market, driving rents higher. Housing affordability is at its lowest in four decades, and there's no way around it.
Say, for example, the real estate market softens. Now it surprised everybody because prices are actually up. Even though we've tripled the cost of mortgage money. Right. Prices have actually increased. All the experts have revised their forecast. That's fine, but remember, people only have three choices. They can buy a home, they can rent a home, or they can be homeless. So if the sales market softens, then the rental market improves. When the sales market is booming, most people don't consider this. Most of the time the rental market starts to soften because would be home buyers. Buyers are pulled out of the rental pool and they're buying homes. Now if they can't buy a home where you've got the lowest housing affordability in four decades, then they're forced to stay in the rental pool, putting upward pressure on rents. And that's one of the things people have to consider. The other thing people are never considering is capitulation and just accepting reality. And the reality is housing is less affordable. Sorry, that's the way it is.
