The hottest Rent Inflation Substack posts right now

And their main takeaways
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Top Finance Topics

Random Thoughts on Mortgages, Household Finances, and Supply Conditions

Erdmann Housing Tracker • 105 implied HN points • 29 Jan 26
💰 Finance Rent Inflation
  1. Low mortgage rates and wider mortgage access historically did not drive overall inflation; when mortgage access tightened after 2007 homeownership fell and rent inflation sped up.
  2. The country is in a housing shortage, and adding multi-family or even high-end units reduces pressure on low-tier rents through filtering and sales chains, so building more supply (including luxury) helps the worst-off.
  3. Household sizes stopped shrinking decades ago and the recent rise in adults per household reflects people doubling up because of the housing crisis, so claims that homes are bigger and households smaller are outdated and misleading.

Have rents stopped rising?

Erdmann Housing Tracker • 42 implied HN points • 06 Jan 26
💼 Business Rent Inflation
  1. Rent inflation has been much higher for lower-income families than for higher-income families, and public statistics don’t capture that difference well.
  2. Rents appear to have flattened since 2022, prompting the question of whether rents have stopped rising or are starting to correct.
  3. New home completions rose by roughly 600,000 a year after COVID, but whether that is enough to stop rent inflation depends on housing supply elasticity; rough estimates suggest about 2.5 million units a year might be needed to neutralize rent pressure.

Hsieh, Moretti, Shiller, and the Rest: Part 3

Erdmann Housing Tracker • 168 implied HN points • 04 Jan 24
💰 Finance Rent Inflation
  1. The rise in home prices is mainly due to obstruction of urban housing rather than urban productivity.
  2. High urban rents have increased nationally post-2008 due to federal lending policies lowering housing production everywhere.
  3. Rising rents explain almost all of the increase in home prices, with excess rent accounting for a significant portion of residential real estate value.

More color on the inevitable rent boom of the 2010s.

Erdmann Housing Tracker • 105 implied HN points • 12 Mar 24
💰 Finance Rent Inflation
  1. The clampdown on mortgage lending in 2008 led to unprecedented rent inflation, reinforcing the relationship between home prices, rent ratios, and access to credit.
  2. The natural experiment since 2008 confirmed that cutting off mortgage access lowered price/rent ratios substantially, leading to collapse in construction and significant rent increases. This situation may have reached a point where new homes could be constructed again on a larger scale.
  3. A regressive rise in home prices occurred post-2008 due to a credit shock affecting existing home values and necessitating a rise in land rents to induce new construction. This situation highlights the impact of housing shortages on rent inflation and home values.

Why is Debt-to-Income high?

Erdmann Housing Tracker • 84 implied HN points • 09 Mar 24
💰 Finance Rent Inflation
  1. The debt-to-income (DTI) ratio for households has generally declined since 2007, focusing more on new mortgage borrowers than all families.
  2. Debt payments have increased for older families since lending standards tightened in 2008, delaying when families take on mortgage debt.
  3. Higher rent inflation due to a lack of construction has pushed up mortgage costs in the early years, contributing to high DTIs.
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