Lease Renewals Up - Renters Hunkering Down Due to Fear of Unknown and Looming Recession
With so much economic uncertainty; rising interest rates, high inflation, and the possibility of a looming recession, renters, and many of us for that matter, are holding our breaths with the expectation that turbulent times could be ahead. Renters are making lifestyle choices that include putting off moves and delaying home purchases. The reality is fear tends to put things on pause.
RentCafé’s 2022 year-end report, states that almost two-thirds of renters renewed leases in 2022 in a market that’s still hampered by rising interest rates and home prices out the roof (no pun intended). The report found for every vacant apartment there were 14 renters competing. The reason so many leases were renewed is because 95.3 percent of apartments were already occupied, so finding a new rental was not easy in 2022. And to top it off, newly built apartment homes only represented 1.5 percent of the nation’s total housing supply. A looming recession + low vacancy rates = increased rental renewals.
Additionally, some housing developments are being put on temporary hold according to various national and local economists. However, Charlotte ranks among the top 10 fastest-growing metros and according to Center City Partners State of Center City” report, there are 7,700 planned apartments — 2,600 that are under construction and 5,100 that have been announced for the Uptown and South End areas alone. However, Charlotte continues to build but under-supply and over-demand remains the issue. We continue to scream from the rooftops…WE NEED TO BUILD MORE RENTAL HOMES! That is the answer!
A serious look at increasing housing supply should be the collective focus for our government and all of us who have the ability to impact housing. Piling on regulations that disrupt the flow of the market is not the answer. We should be looking at this issue retrospectively and through a lens that encapsulates a comprehensive picture of the problem and the solution. That means when considering a solution, looking at the possible unintended consequences; peeling the onion layer by layer and dealing with the issue head-on versus encouraging false hope with surface level solutions.