The Lakewood Scoop Report: Skyrocketing Mortgage and Rental Costs Tied to “Lack of Development” | Raphael Berner

Is that the case in Lakewood where developments are booming and even spilling over into neighboring towns?

Lakewood seems to be an anomaly when it comes to housing development, but somehow is not immune from the skyrocketing mortgage and rental rates. There seems to be a disconnect between the report and Lakewood.

Anyone that lives in Lakewood can see that mortgage rates are rising and keep on rising to the point that prospective homeowners are being priced out of the market and rent is harder to afford than in a decade if you can find a place to begin with. That comports with the new Redfin report.

In the report, Redfin shows that nationally listed rents for available apartments rose 15% from a year ago. And the median listed rent for an available apartment rose above $2,000 a month for the first time. The report shows that rents are up more than 30% in Austin, Seattle, and Cincinnati, which generally have the lowest rental rates in the country. In Los Angeles the median asking rent is $3,400. Formerly affordable cities like Nashville now have a median rent of $2,140, up 32% from last year. These are full-fledged cities with a lot of apartment buildings. Lakewood is becoming a city for sure but so far building large apartment buildings has been denied to developers.

“Housing is getting less affordable for everyone at every level,” says Daryl Fairweather, the chief economist for Redfin. “After the last housing crash, we didn’t build enough homes for a decade. And that lack of supply is the biggest force pushing up home prices and making it harder for people to afford to buy a home.”

Is that the case in Lakewood where developments are booming and even spilling over into neighboring towns? Lakewood seems to be an anomaly when it comes to housing development, but not immune from the skyrocketing mortgage and rental rates. There seems to be a disconnect with the data somewhere.

Fairweather says homebuilders built fewer homes in the decade starting in 2010 than in any 10-year period since the 1960’s. “So, I think it’s going to take at least another decade to dig ourselves out of this hole.” Counties, Townships and States are changing the zoning laws permitting smaller, more affordable homes built closer together is a proposed solution. We see that in Lakewood, but at the lower end like Section 8 you have to apply and get on a long list that could take years for you to finally move in someplace. Someplace likely that is not in the area you need to be in and too small for a growing family. Even HUD mortgage rates are becoming unaffordable.

When more people are renting (when they would rather own) it keeps the demand and prices up in both markets. “Rents are going up just as fast as home prices are,” says Fairweather.

The rising demand for rentals from people who would rather buy is projected to continue and get even worse. While mortgage applications are 21% lower than a year ago, rising interest rates are pushing people who would rather buy, out of the market.

The Redfin report only tracks asking prices for vacant units that are available to rent. That doesn’t mean that current renters are seeing their rent go up by a lot. Dollar numbers and availability in some cities may be at the higher end because the report misses some private home landlord listings which make up a fair segment of Lakewood rentals.

The government’s own consumer price data shows that the average rent Americans actually pay now and not the price of new listings zoomed to 4.8% in the past year, much higher than usual.