Household incomes have outpaced rent increases in the past year, resulting in a greater variety of luxury options for tenants earning above the median income. The surge in new apartment construction, driven by favorable borrowing rates and rising rents early in the pandemic, has flooded the market with over 1.6 million units since 2020, with another million expected by 2025. This boom, primarily in desirable locations like Phoenix, has eased rental demand, prompting property owners to offer concessions such as rent discounts. Approximately one-third of rentals listed on Zillow now come with concessions, up from 10% in 2019. Developers are focusing on high-end “class A” units, which now dominate the market, offering premium amenities and competitive pricing. Looking ahead, while construction of multifamily units remains robust, developers are scaling back amid higher interest rates, signaling a potential end to rental bargains by 2026.
Source: https://www.businessinsider.com/golden-age-rich-renters-not-buying-home-price-new-apartment-2024-6
