Rental prices show increases in metro Detroit

METRO DETROIT — Those looking for a place to live may find themselves reaching deeper into their wallets — and their savings — even when it comes to renting.

Home-finding sources such as Dwellsy.com reported that single-family home rent prices were  up 37% from May 2021 to May 2022.

Local organizations that assist families in securing housing are confirming that it is becoming more difficult and more expensive to get families secure housing.

“Rental prices are going up all over the place,” said Heather Van Poucker, the executive director of the Ferndale Housing Commission. “We administer the housing choice voucher program, which is commonly referred to as Section 8. We offer families a partial or full subsidy to help them with their rent in Wayne Oakland and Macomb counties. We have seen our per-unit cost go up about 25% since 2019. … We’ve also found significant increases in the time it takes for a family to secure a home, since there are less places available and more families looking for affordable housing.”

Michael Dreon, the executive director of the Rochester Area Neighborhood House — which aids families in several essential areas, including housing — agreed.

“We’ve seen a significant increase in client requests for eviction prevention support since the national eviction moratorium ended,” he said in an email. “Our clients are sharing (that) rent is increasing when they go to renew their leases.”

Dwellsy.com’s report stated that single-family rentals continue to be the hottest type of rental for people across the U.S., pushing rents to the higher levels, citing persistently high demand and lagging supply as the primary factor.

They listed national median prices for single-family home rentals at $2,260 per month in May 2022, which was compared to a median cost of $1,650 in May of 2021. For apartment rentals, the average price was listed as a median cost of $1,650 per month in May 2022 compared to a median cost of $1,550 in May 2021, which was an increase of 6.5%.

According to Rent.com, Detroit is bucking the trend with decreases in rental costs, but its surrounding communities are increasing along with the rest of the country. For example, they listed studio apartment rent costs increasing annually by as much as 193% and costs for one-bedroom apartments increasing by 24% in Sterling Heights. They described studio apartments, which are generally more affordable, as commonly increasing more in cost across the country due to the increase in demand. They listed Troy rent costs up as much as 28% for one-bedroom apartments and 34% for three-bedroom apartments.

Realtor.com just published its May rental report, which shows the U.S. median rental price as $1,849. This is 26.6% higher than in May 2019, before the pandemic began. However, they said that May trends also offered renters a glimpse of a light at the end of the tunnel: rents posted the smallest year-over-year gain since September 2021.

The Realtor.com report states that a key factor driving the ongoing rent surge is a lack of supply, since rental vacancy rates, which were already trending lower, have taken a sharp dive during the pandemic. It also stated that these trends are magnified in the biggest cities that tend to attract younger residents, many of whom are in the early stages of their careers and are looking for the flexibility in their living situations.

Exacerbating the issue may be that mortgage rates for those buying homes are going up, which is causing more people looking for homes to rent. With more people trying to rent homes, the price of those rentals would increase, as well.

“In my personal observation that prices are going up due to increases in inflation or increased costs in landlords maintaining their properties,” said Van Poucker. “I think (landlords) might also be seeing the opportunity to charge more, so they are. A lot of our properties are older, built before 1970. There’s few reasons for those properties to go up in cost.”

National Association of Realtors Chief Economist Lawrence Yun remarked in a press release regarding recent data from the Federal Reserve demonstrating these increases.

“Today’s announcement by the Federal Reserve set a big increase in interest rates and means several more rounds of rate hikes are on the way in upcoming months,” he wrote. “On (a) $300,000 mortgage, the monthly payment has risen from $1,265 in December to $1,800 today. That’s painful and, consequently, will shrink the buyer pool. Home sales have recently been trending down towards 2019 figures. Sales could fall even further with some inventory sitting on the market for more than a month like in the pre-pandemic days. Pricing a listed home properly will, therefore, be the key to attracting buyers. In the meantime, rental demand will strengthen along with rents. Only when consumer price inflation tops out and starts to fall will mortgage rates stabilize or even decline a bit.”

Van Poucker advised renters to check their credit history and for those using Section 8 funds to help pay their rent to check their local laws to ensure they are entitled to use that to help.

“We’re working with low-income families, and those families might not be aware of low-income ordinances that prohibit landlords from refusing people who pay using Section 8, so you can look to see if the community you are moving into has these regulations,” she explained. “Before you start your search for a new home, make sure your credit history and rental history and references are in good shape.”

Residency assistance is one of the most basic needs a person or family has, and yet it can often be one of the most difficult aspects of life to secure. Those attempting to help them in their time of need are saying that many families could suffer if it continues to become even more difficult.

“Eviction prevention and shelter assistance is one of the most requested services that Neighborhood House provides,” wrote Dreon. “We’re one of the few agencies in the area that provides financial assistance pre-eviction.”