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"Rental Market Apocalypse Pushes 4 Million Americans
To Face Foreclosures And Evictions As Prices Soar"
by Epic Economist
"The United States is facing a painful housing crisis. While home prices soared to unprecedented levels, having surged by roughly 20 percent compared to a year ago, those who decided to turn to rent instead are witnessing similarly shocking increases. According to Realtor.com, median national rents rose a whopping 12% between August 2020 and August 2021, while rent applications went up as much as 95% in some cities, according to apartment listing platform RentCafe. The average rent is now at $1,633 a month - $169 more than this time last year and nearly $200 more than 2019’s numbers.
Millions of potential first-time homebuyers have been completely priced out of the market by now, and their only alternative is to keep paying inflated prices to live in a home they'll never own. Housing advocates argue that much of the increase in the cost of housing can be attributed to the buying frenzy initiated by those affluent buyers. They have snatched all the affordable homes they could find and frequently started bidding wars to get desirable properties, which pushed home prices to extraordinary levels. According to a new report released by Harvard Housing Studies Center, low-income households have significantly more difficulty reclaiming financial footing, and millions of them are at risk of foreclosure or eviction in the coming weeks and months.
As more and more potential buyers get burned-out, tired of bidding wars, skyrocketing prices, and limited options, they have been left with no other choice rather than renting. However, the rental market is facing its own crisis. Some call it "the rental market apocalypse," referring to the growing imbalances within the market: while millions remain at the brink of eviction, hordes of frustrated buyers who have been forced to give up the competitive housing market are now finding an equally frenzied rental scene - one where soaring rents and shrinking supply are growing concerns.
But with many Americans still struggling to financially recover from the recession, and at least 4 million households at risk of eviction, these cautionary demands may make it even more difficult for people to rent. At the moment, a devastating eviction and foreclosure crisis is fast spreading all across the country. This mounting catastrophe happening right before our eyes is worsening despite the $46 billion allocated in rental and mortgage relief programs by the federal government. These programs are failing to keep people out of the streets given that the application process is extremely bureaucratic and many people only get approved to receive help after it's too late.
According to an updated analysis of U.S. census data by Goldman Sachs, nearly 4 million households still are behind on their rent, and at least 750,000 are expected to be pushed out of their homes by the end of the coming month. Despite the record influx of government funding, states have failed to allocate 89 percent of the billion-dollar rental assistance program, according to the US Treasury Department. That is effectively putting America at the brink of a homelessness crisis of devastating proportions.
“We’ll see a lot of renters out on the streets,” highlighted Michelle Dempsky, a staff attorney for Legal Aid of Southeastern Pennsylvania, noting that she has already seen a significant increase in the number of eviction cases she has been assigned since the moratorium was lifted. As Fran Quigley, a housing law professor at the IU McKinney School of Law, points out, the eviction crisis is only a symptom of a larger problem."We’ve taken something that most people agree is a human right - having a safe and secure place to live - and made that available only to people who can afford to pay a price that makes a profit for someone else," Quigley emphasizes.
As the housing and rental markets face worsening crises, a foreclosure and eviction tsunami has begun. Our leaders, who were supposed to assist our people, don't seem to be bothered with the risks of letting millions of people fall into a spiral of systemic poverty and homelessness. Needless to say, this will rapidly evolve into a major national crisis. A few years ago, it would be hard to imagine that the wealthiest country in the world would allow a significant part of its population to be pushed out of their homes. Yet, this is where we are right now. Unfortunately, this catastrophic situation is only a hint of what is coming for us. As our nation gradually collapses into chaos, the worst is yet to come."