Whether you’re looking for new apartments in Wisconsin or would settle for older, cheaper units, it’s no secret that finding adequate housing in today’s market is quite a challenge. For students, young couples, and even families looking to find a foothold in the real estate market, the lack of adequate housing has turned many prospective homebuyers back into renters.
The housing shortage of 2022 is also making it increasingly difficult for students to find apartments for rent. With more and more people moving to cities, the demand for housing has outpaced the supply. This has led to an increase in rental prices and a decrease in the availability of apartments. In this article, we will explore the reasons behind this housing shortage and its effects on apartment rentals.
Why Is It So Hard To Find Affordable Housing?
If you’ve spent much time looking for affordable housing lately, you may have noticed that it is slim pickings out there. Between lack of available, convenient rentals and skyrocketing prices, looking for a place to live is growing increasingly stressful. So why is it so hard to find affordable housing?
The answer to this question comes down to supply and demand, much like any other capitalistic venture—in short, there’s not enough physical housing currently built to go around. It is estimated that the United States is between four and seven million units short of the demand for housing in 2022. While the United States has been struggling to produce enough housing for everyone since 1995, we have also seen staggering inflation which has likewise impacted the housing market for the worse. This housing scarcity has encouraged a wildly active real estate market, with investors and prospective homebuyers alike desperately trying to snatch up any housing within their budget, even if the property has been overpriced for its market value.
On top of these conditions, logistics for construction have grown increasingly complicated after the pandemic wreaked havoc on the global supply chain and caused labor shortages across the workforce. Since the pandemic, we have also seen record highs for lumber prices, reaching as high as $1,515 per thousand board feet in 2021, with prices in 2022 still hovering around $1,271 per thousand board feet. This has not only made creating new homes more difficult, but it has caused the price of new homes to jump up significantly as well. Some experts speculate that the housing shortage will not improve within the next 10 years.
How Is the Housing Shortage of 2022 Affecting Apartment Rentals?
For hopeful prospective homebuyers just hoping to find a permanent, the current housing shortage, coupled with inflation and the pandemic crisis, has made this landmark purchase restrictive to the point that they are giving up on the idea entirely. In 2021, average home prices in the United States rose by nearly 20%, effectively rendering the process impossible for those on a tighter budget or who are just trying to get started. This number is even more dramatic in some developed urban regions, with housing prices in major cities jumping up to 30% in areas like Phoenix or major cities in California—especially areas with a high percentage of college students.
Is There a Student Housing Shortage?
Rent costs have increased by as much as 31% since 2020 in areas across the United States, and student housing is not immune to this reality. Many students in California are facing longer commutes to their campuses rather than facing the sky-high rent prices near the school grounds, which has prompted some students to sleep in their cars and others to pile into tiny apartments. Others have opted to live out of hotel rooms or simply wait the academic year out rather than continue to face the draining and less-than-rewarding rental market.
However, it’s not all bad news: U.S. home construction is working towards getting back on track with a 22% increase in production since February of 2021. This marks the fastest rate of growth for the housing market since 2006, a beacon of hope in an otherwise discouragingly fierce housing market. Also, interest rates have reached a staggering 3.64% for a 30-year fixed mortgage, which should slow down the house-buying mania and open things up in the rental market as well.
New apartments in Wisconsin are currently under construction, with some like those at Watertown Housing due to open in August of 2022. For many college students, this blessing can’t come soon enough.
Are you looking for affordable new apartments in Wisconsin? Contact Watertown Housing today for floorplans and availability!