Renters Alert: 6 Predictions You’ll Want to Hear for 2018
Predicting the Rental Market in the Year to Come
If you’ve been a renter for any real amount of time, then you’ve probably gotten somewhat used to living a little bit on edge. The unpredictable nature of the rental market can make you nervous as you close in on renewing your lease. And it can make you extremely nervous if you’re contemplating moving to a new place this year.
Most rental market trend-prediction posts are written for the education of landlords, but this one is dedicated to the renters. So, to put yourself at ease as you study up on what’s likely to happen in the rental market in the year to come, read on for details about what’s in store.
1 – Rents Will Stabilize as More Homes Go Up for Sale
For the last few years, the housing market has had a major problem – a severe lack of inventory. This lack of inventory in the housing market kept many prospective homebuyers on the sidelines renting, as they waited for more inventory to become available and for prices to stabilize.
Now, with more rental inventory coming online alongside more housing inventory in the real estate market, rental prices are predicted to stabilize in most markets and even come down in some.
2 – Many Prospective Buyers Will Wait to Leave the Rental Market
We just said the opposite, but both are valid (if not conflicting) predictions. Many experts are saying that despite increased inventory drawing them into the real estate market, many prospective buyers will stay renters until they know how the new tax laws will affect their ability to purchase — especially in states with some kind of local income tax.
3 – Inflation Will Drive Up Interest Rates Marginally
How does an increase in mortgage interest rates impact renters, you might ask. Well, it could couple with the prediction above to keep more prospective buyers keeping it cool in the rental market. Or it could create a sense of urgency that will get them to jump into buying a home before inflation drives interest rates even higher.
4 – The Millennials Are Coming—to Rent
As one of the largest generations in the history of the country continues to work its way through college, it will continue to impact the rental market by driving up demand and sopping up available inventory.
5 – The Boomers Are Coming Back — to Rent
On the opposite end of the demographic spectrum, the largest generation in the history of the United States will continue downsizing as they retire, re-entering the rental market and sopping up more available inventory. The flip side of this is that they will also be freeing up more real estate inventory in the housing market (see prediction one above).
6 – Landlords Will Continue to Maximize Their Return
This one isn’t really a prediction. No matter where you live, look for landlords to work to maximize the return on their investment properties – it’s just the nature of the game. They will ask for whatever they think they can get, so do your homework before you renew your lease or move into a new rental. Don’t pay more than the going rate for what you’re getting.
Some Ups, Some Downs, But a More Stable Year Overall
Predictions are funny. Even when they are based on the observable action of the markets, they can still be off target. The year to come will see some major shifts in the rental and housing markets, but overall, things are looking like they will be less volatile thanks to increasing inventory in the housing market, yet more volatile thanks to barely-understood changes in tax law.