Who said rents never go down?

[Rick Pozos]

When interest rates shot up, the market seized. It happened to office, multi-family and single family markets. Now that rates have come down a little, maybe there will be a little easing up on the downward number of sales. There is another issue that this is causing, rental rate pressure. Rental rates are coming down due to some excess inventory. Also, when landlords can not sell their home because no one can afford 7% interest with 3% interest rate prices, something has to happen. 

One must realize that a 3% interest rate for a $400k mortgage will have a payment of  $1686 P&I only.

When that interest rate is 6%, to keep a payment close to under $1700 the mortgage is going to be about $283,000. 

That is about 30% drop in price to stay at the same mortgage payment. If homeowners or investors are not willing to drop prices fast enough, what are they going to do, RENT. This causes more properties on the market for rent, further pressure on rental prices.

The result is that prices are going down. More landlords are offering incentives to keep their properties rented. This is happening across Texas and the Southeast, but I think it will happen across the nation. What do you think??

https://www.expressnews.com/business/real-estate/article/zil...

[Theresa Harris]

I agree with David-trends are dependent on locations.  Where I am, rents have gone up and there is a shortage of rentals.