Here’s where we think apartment rents are heading in 2022


Homeowners have had a tough race during the pandemic. During much of the crisis, an eviction ban barred landlords from removing tenants for non-payment of rent. The blow was especially brutal for mom-and-pop homeowners – those with a handful of properties that lacked the deep pockets and borrowing options that could have helped big business weather the storm.

But at this point, things are looking up for the owners. Apartment rents have skyrocketed during the year 2021. And at the dawn of the new year, a similar trend can be expected for two reasons.

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1. Houses are still too expensive

By the summer of 2021, home prices had risen nearly 20% year-over-year, according to the S&P CoreLogic Case-Shiller Index. And some experts believe house prices may continue to climb during 2022.

With a large portion of home buyers – including first-time buyers – being out of the market, many people in need of housing will have no choice but to continue renting until real estate stocks run out. open and prices stabilize. And as rental demand skyrockets, homeowners will have the opportunity to keep raising prices.

Additionally, while a slight increase in available homes could make buying more feasible in 2022, we are unlikely to see a huge influx of listings in the first quarter of the year, as this has historically been a less popular time to put homes on the market. And if fears about the economy and the pandemic persist in the second quarter, the housing market could miss its typical spring boom, prompting potential buyers to resign themselves to renting instead.

2. The owners are still recovering

Over the past year, many homeowners have had no choice but to cut rents and offer pandemic prices in an effort to get leases signed. Now, many may attempt to charge higher rents to offset these forced discounts.

Additionally, the pandemic has in fact driven many family owners out of business, leaving room for larger property management companies to grab a bigger share of the market. These businesses may be less willing to negotiate rents than private landlords.

Is Now the Right Time to Invest in Multi-Family Properties?

Last year, the purchase of apartment buildings or residential REITs (real estate investment companies) could have been read as a precarious bet. In 2022, this is a much more viable opportunity for real estate investors.

Since the start of 2021, the median rent price for a one-bedroom house has increased 12.1%, Zumper reports. In contrast, the median rent for a bedroom rose only 0.3% in 2019 as a whole and only 0.6% in 2020.

Now it’s worth noting that month over month things appear to have slowed down in November, with one-bedroom rents only increasing 0.5%. But it’s also important to keep in mind that rental demand can be seasonal in nature. At this point, we might see a brief drop in signed leases as people settle in for the holidays. But in 2022, demand could rise again and rental prices could follow suit, making it a great time to join in on this action.


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