In the past few months, home prices and rental costs have skyrocketed. After so many companies were forced to send their employees home for the pandemic, some companies are making it permanent. This has led to a reshuffling of workers who are taking advantage of the geographic flexibility allowed by remote work.
“Various groups were warning that we were millions of rental units short in the United States, particularly affordable rental units, so we’ve known for a long time that we didn’t have enough housing stock to meet everyone’s needs.” —Heather Long, Washington Post
Michigan home values have gone up 13% while rental costs have been raised about 4%. Along with the lumber shortage hurting builders, it is likely these soaring prices will continue to rise and housing will be in short supply.
Listen: Heather Long discusses the skyrocketing housing and rental costs.
Heather Long is an economics reporter for the Washington Post and recently wrote an article titled “Rent Prices are Soaring as Americans Flock Back to Cities.” Long says there are two parts to the story, half of which is because of the pandemic. “When you look at the cities that have the highest rent increases right now are places that were perceived as having more space and perceived as more affordable,” she says.
Long says the other half of the story is about demographics and which generations are deciding to rent. “We obviously have a lot of 20- and 30-somethings who want to rent and will continue to rent so Gen Z and a lot of millennials are still renting but we also have a third generation that is coming in hot and heavy into the rental market and that is a lot of baby boomers.” According to Long, some boomers are moving into the rental market because they do not want homes that require maintenance and upkeep.
Long says while this problem was exacerbated by the pandemic, the current housing crisis was long forewarned. “Various groups were warning that we were millions of rental units short in the United States particularly affordable rental units, so we’ve known for a long time that we didn’t have enough housing stock to meet everyone’s needs,” she says. “And it’s only gotten worse during the pandemic.”
Web story written by Dan Netter