Are you wondering what’s in store for rent prices during a recession? While a recession hasn’t been officially declared, depending on your financial situation, it may feel like we are already living in one. However, whether we’re in a recession or not doesn’t necessarily mean rent prices go down in real dollar amounts.
Looking back, rental costs went up by a staggering 23.5% between October 2019 and October 2022. The odds that rent will come down enough to compensate for these historic increases are low.
Will Rent Go Down in 2023?
There are indications that we’re seeing a decreased rate of price hikes for renters in recent months, but that doesn’t always translate to decreased rent.
It’s important to know that much of what happens in the housing market is regional. While some areas may see decreases in rent prices, overall it leans towards stabilization. This is where rents stop increasing at alarming rates.
For those who pay high rent that was increased in during the pandemic, 2023 may provide an opportunity to move. Moving into a new rental property may allow for more affordable leasing.
What Does Decreasing Rents Mean for Investors?
If you’re considering investing in real estate, decreasing rents should be factored into your equation when purchasing a single-family home or multi-unit property. However, focus on the long term. The potential rate of decrease isn’t likely to eliminate a suitable property’s profitability over a long period of time.
If you are interested in investing in a real estate property, speak to one of our loan officers here at First Centennial Mortgage. We’d love the opportunity to work with you.
Or, if you’re tired of paying someone else’s mortgage and not your own, we’d love to speak with you. Reach out to us today!