DARK SECRETS: Mildly infuriating things about homes | Rare Historical Photos

No industry has managed to stay grounded since the global pandemic ransacked the globe. But the real estate industry seems to have take one of the biggest hits, making endless headlines for skyrocketing home prices, extended eviction moratoriums, and the young generation not being able to afford homes, like ever. Not that they were able to do that before, but after the pandemic, the chances for many millennials became virtually non-existent.

That means that properties to rent will stay the reality for most people. Even if more and more of them are no longer able to afford them. In fact, one study showed that more than 6.5 million American households are behind on their rental payments, meaning that landlords are collectively owed upwards of $20 billion.

Another portion of society is not able to afford a rented home at all. The National Low Income Housing Coalition’s annual “Out of Reach” report finds that in a vast majority, a whopping 93% of U.S. counties, workers can’t afford a modest one-bedroom. The average hourly worker currently earns $18.78 per hour, the report finds, more than $6 short of the wage needed to afford a two-bedroom rental.

According to the same report, an average minimum wage worker in the U.S. would need to work nearly 97 hours per week to afford the average two-bedroom home, taking each state and locality’s minimum wage. That equals more than two full-time jobs.

But as if that wasn’t enough of a crisis already, Nathan Miller, the founder and CEO of Rentec Direct, property management software for real estate professionals, believes that rental rates continue to increase, even if availability is starting to increase. This is because Nathan believes that over the next couple of years, a high number of landlords will exit the market.

“The costs we’ve seen landlords incur over the course of the pandemic have brought a lot of attention to the delicate nature of a low-margin business. I think landlords in many markets across the country will take advantage of the real estate market by selling and moving away from the rental industry entirely,” he explained.

But it’s no good news for tenants if landlords decide to exit the market. “Supply will be affected and might be a catalyst for rent increases. In addition, landlords who decide to continue renting are likely to hedge against the next pandemic or policy change. Rents will need to rise in order for landlords to recoup costs and improve their profit margins,” Miller argued.