Pay the Rent: Cooling Rents Provide Some Relief Amidst Housing Affordability Crisis

Rental Market Dynamics

Despite the decline in annual rents the median asking rent nationally is $1,713, showcasing a 22% increase since 2019. Pay the rent growth peaked at 15% annually in early 2022 but slowed to a modest 0.4% by the end of 2023.

Even cities with historically high rents like Manhattan witness a cooling trend with November marking the first rent drop in 27 months. Multifamily construction has surged reaching levels not seen since 1988, with 436,000 units completed in Q3 2023.

However, challenges such as higher building costs and material shortages could impact the future pace of new constructions. The National Association of Home Builders anticipates a 20% decrease in multifamily construction next year.

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Affordability Challenges

The affordability dilemma is highlighted by the Harvard research which lists 12 million renters as substantially cost-burdened meaning they must spend more than half of their income on housing. Following the expiration of epidemic protections, evictions have increased and rental aid is insufficient leaving a record number of income-eligible renters without help.

Rental conditions are softening but affordability remains a critical concern emphasizing the need to pay the rent for continued new supply and enhanced rental support to address the pressing challenges faced by renters.

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