Inflation has continued to make headlines in recent months, and as of Tuesday, the Consumer Price Index reported a 0.6% price index increase for all goods in January — driving up annual inflation by 7.5% — marking the biggest gain since February 1982.
Inflation is driving prices of everything, but according to a report from real estate firm Redfin, rental prices in United States cities are seeing a massive increase.
At the peak of the COVID-19 pandemic, rents in major cities were hugely discounted and concessions were common. Many urban residents left their rentals — and permanent dwellings — for a more suburban life. Perhaps they were escaping the threat large crowds of people had become, or they relocated for more affordable housing, or their work-from-home situation no longer required them to be in the city.
Now, according to Redfin’s rental market tracker, average monthly listed rents are up more than 14% from last year. In New York, the costs have risen more than 30%, and in Austin, Texas, 40%.
As a result, many tenants who moved into a rental at a reduced rate over the last two years could face a big hike when their lease is up.
If you’re currently renting and living in a big city, be prepared to have a conversation with your landlord before your lease ends. And, of course, it always helps to have a back up plan.
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Episode 6 – Making Sense of the Real Estate Insanity With Michael Farrell