Rising rents do not seem to be a problem for tenants at market prices who pay on time.
Inflation drives up the cost of almost everything, and rent is no exception. Rent growth, like broader inflation, is at its highest level in 40 years.
These resilient or at least employed and well-budgeted tenants continue to pay their rent. RealPage reported this week that market-priced apartments paid 95.6% of rent due in May 2022, up 0.2 percentage points year-over-year.
This is considered healthy, but still slightly below the pre-COVID standard of 96% to 97%,” according to the RealPage research blog.
Renter household incomes increased by 21.4% through May 2022, compared to a 21.7% increase in asking rents, when indexed to January 2020.
Lease renewal rates are the highest on record, with approximately 57% of expiring leases being renewed in the past year.
Rents were highest in most of the Sun Belt and lowest in New York.
Autopay Rent Reduction Boosts Venterra Realty
John Foresi, CEO of Venterra Realty, tells GlobeSt.com that his company believes paying rent shouldn’t be a problem and is offering a $20 rent rebate to those who pay with its automatic payment rebate program.
“It simplifies the payment process and rewards loyal residents who choose to register at a time when tenants need it most,” Foresi said.
Houston-based Venterra Realty operates in Texas and much of the Southeast.
Rising prices of “everything” remains the risk
RealPage, vice president, head of economics and housing, Jay Parsons, writes in the blog that the risk is that households of all types, renters and owners—pay more for food, gasoline and other essentials.
“The booming real estate market has also driven up property taxes and insurance across the country, which directly impacts landlords and indirectly impacts renters (via increased rents to offset rising costs)” , writes Parsons.
“The key is tenant income. Wage growth has been greater in recent years among younger workers who are more likely to live in apartments. RealPage tracks the incomes of households that sign new leases each month, and there’s good news: Incomes for this group keep pace with rents. »