Lathrop Realtors from our team recently read an article about the housing market and the shift to having housemates. As we read this article, it got us talking about trends in real estate and where the market is headed:
The end of the eviction moratorium put millions of tenants at risk of losing their homes. That risk remains, but the expected avalanche of evictions has not arrived. In September, once the ban expired, new eviction filings were up 8.7% over August, yet the total number of eviction cases is still only half what it was in the same period before the pandemic.
The real eviction rate could be higher, as many state and local eviction moratoriums are still in place. But for now, the news is very good. A massive, nationwide wave of evictions would have put huge numbers of people on the hunt for new places to live at the same time amidst a period of record-low inventory (vacancy rates recently fell below 3% for the first time in three decades).
So, let’s weigh up on this. There is rising concern about the real estate market and the possibility of increased evictions. Here’s what we see thus far in 2022 and what we see going forward:
According to a report from Freddie Mac, annual rent growth is forecast to be 3.6% in 2022, with rent expected to rise in every U.S. market. The highest rent increases occurred in the following cities:
- Phoenix 8.2%
- Tampa 7.7%
- Las Vegas 7.4%
- Tucson 7.1%
Milwaukee and New York City suburbs saw the lowest rent growth rates, ranging between 2%-2.5%.
In California, rents increased as well, but the California Tenant Protection Act stipulates annual rent increases can be no more than 5% + local CPI (CPI = inflation rate), or 10%, whichever is lower. (This law was enacted on January 1, 2020 and expires January 1, 2030).
On September 30, 2021, the California eviction moratorium was ended, but Los Angeles extended its coronavirus eviction moratorium through December 2022. This prevents residential landlords from evicting tenants for nonpayment of rent, have unauthorized pets or occupants, or who cause a nuisance.
However, evictions across the country have increased in 2022, with some renters being forced to choose between paying rent or buying food. Others are looking to cut costs by living with family members.
Foreclosure filings have increased as well: According to data from ATTOM Data Solutions published in April 2022, there were a total of 30,674 U.S. properties with foreclosure filings — default notices, scheduled auctions, or bank repossessions across the United States. While this number is down 8% from the previous month, it increased 160% from April 2021.
Per the report, one in every 4580 housing units had a foreclosure filing in April 2022. Illinois, Ohio, and New Jersey had the highest foreclosure rates:
- Illinois: 1 every 2241 housing units
- New Jersey: 1 every 2292 housing units
- Ohio: 1 every 2585 housing units
- Indiana: 1 every 2660 housing units
- Nevada: 1 every 3043 housing units
California was ranked 12th in the nation, with one foreclosure per every 4,154 households.
Lathrop Realtors Predictions
The U.S. inflation rate is 8.5%, the highest in 40 years. The increased costs of food, utilities, rent, and other expenses will put a strain on households across the country. This could cause eviction and foreclosure rates to increase for the rest of 2022. We will continue to monitor this situation closely for any new updates.
About Range Homes
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