Close to two-thirds of landlords plan to raise their rent prices over the next year.
While that 65% may seem like a high percentage, it is down from the 70% of landlords who planned to raise rents as of October 2022, according to a new report from Realtor.com®. For the 35% of landlords who are not planning to raise rents, nearly half said it’s because they hope their current tenants will stay if rent remains the same, 40% said they have a strong relationship with their current tenants and 32% said their current prices are at or above market value. Fifteen percent said they expect market rent prices to fall over the next year, so they are keeping their monthly rent prices the same. However, for renters, 55% said they cannot afford a rent hike. Of renters who recently renewed a lease, just 28% tried to negotiate price with their landlord. For landlords, 52% said they would be more likely to negotiate over rent prices if the tenants had resided in the property for several years. However, 31% of landlords said they would be extremely unlikely to negotiate rent prices when renewing a lease and 28% said they would be somewhat unlikely.
For landlords looking for new tenants, the majority said a previous eviction is the top reason to deny an applicant. Other concerning details, according to landlords, include level of income (47%) and a history of late rent payments (42%). Most landlords (58%) said they will let a potential tenant explain any negative information on their application.
Most renters are still struggling with finances, thanks to rising costs outpacing wage growth. Two-thirds of renters say they are saving less than they were a year ago. Around 30% of renters are considering becoming homebuyers over the next year, but nearly 82% said interest rates and inflation are impacting those plans. For renters who are not planning to buy soon, 60% said it is because they do not have enough for a down payment, 41% do not think they could get a mortgage and 39% said mortgage rates are too high.