Why have rent and mortgage prices doubled(or more) in the past 2 years?
In: 0
This depends on your location
Rent and mortgage prices are affected by demand and inflation like everything else. Inflation has been high since the pandemic which has been increasing the cost of living.
The pandemic also increased the demand for housing.
People with the ability to work from home started moving away from bigger cities to smaller towns and suburbs causing a housing crisis in towns that weren’t building enough new homes to meet demand.
Since big city folks are willing to pay more for houses, this causes a surge in market value in those towns.
People also wanted to move out of apartments and crowded buildings to avoid getting sick.
Combine this with a reduced rate of building homes because of the pandemic and you get a surge in prices.
Real-estate is also one of the few solid investments you can make right now. Increasing housing costs causes people to buy homes as an investment. When landlords own 2-3 homes or more to rent them out, this reduces the availability of homes for families and increases costs further.
The rise of AirBnB and similar businesses has also increased the demand for housing.
But with interest rates on the rise, the demand for housing is going to come down as people will have a harder time borrowing money. The concern now is that it may lead to another housing crash.
Latest Answers