When will Rents goes up?

[Alexandre Marques dos Santos]

With properties prices going up like this, when do you think rents will catch up? Do you think we are in an economic environment to have a raise in rents?

as a background I have some properties in Houston, Texas. Over the last year prices moved up by 10-15%, but rentals are at same level...

[Marcus Auerbach]

We have a similar situation in Milwaukee - median sales prices have gone up 10.26% in 2020 YoY, rents have increased only about 1.2% YoY.

Investors are part of that dynamic, more properties rented means fewer owner occupied and that is shifting competition from rentals to purchase.

Purchase affordability is still better than it was in the 1990s and 2000s, thanks to higher wages and lower interest rates. With a tidal wave of millennials pushing into the home buyer market we will continue to see upward pressure on home prices, especially below 300k. Sellers of these homes are buying in the 400 and 500 range and we see that pressure now cascading upward as well. In short: we can expect home value to continue to go up in 2021, rents will remain high, but I don't see them increase much.

More on this on my YouTube channel, which you can find on my BP profile page.