by Martin Armstrong
Housing costs have continued to rise in the US. Recent data provided by Redfin shows that the national average rose 11% year over year this August. Costs are expected to decrease as people simply cannot afford to pay more. Additionally, supply is expected to increase as there are around one million rental units under construction. However, construction has been slow due to mixed supply chain shortages and inflation.
Some areas experienced a greater increase in rental costs. Cincinnati, Ohio saw prices rise 26%; Pittsburgh, Pennsylvania, was up 22%; Indianapolis, Ind., up 21%; Nashville, Tenn., was up 20%. Rental prices in the New York and New Jersey areas increased by 18%.
Not all fingers can go to the owners as they too struggle to survive this inflation. Maintenance and public services have risen in price. Property taxes continue to rise, as does insurance. Rising property values have become a double-edged sword for many homeowners. Landlords lost money during the rent and eviction moratoriums and are now making up for it. So many tenants ran away and never paid back the rent. The government created this problem.
Countless homeowners are turning to Air B&B and other short-term businesses. Landlords are forced to raise prices to make a profit, but at any moment, the government can put in another moratorium and leave landlords high and dry. The government needs to deal with outrageous property taxes and encourage, if not incentivize, builders. If costs continue to rise, we will see an increase in homelessness across the country as the average person can no longer afford shelter.
