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San Francisco and Bay Area rents continue to decline at a rate faster than the national average. Rents in San Francisco in December fell 1.1 percent% to $2,174 per month.
Currently San Francisco and San José are the only two metro areas with populations over 1 million that have rents lower than pre-pandemic levels.
Analysts cite the ongoing tech layoffs as having a major impact on rentals.
While much has been made of the “cooling” of the housing market, the fact is both home prices and rents are still rising, just not at the absurd rate of six months ago.
Continued rising mortgage rates, coupled with high inflation, are keeping many first-time buyers out of the housing market and severely impacting renters.
As a result, applications for mortgages hit a 22-year low in June as many would-be buyers adopt a “wait-and-see” attitude.
As rents continue to increase faster than incomes – currently a 15-year trend – the number of households paying more than 50 percent of their income in rent could grow to 13 million by 2025, up 11 percent from the current rate according to Harvard University’s Joint Center for Housing Studies and Enterprise Community Partners. Traditionally, household paying more than 50 percent of their income in rent are considered “severely cost-burdened.”
Moreover the number of renters is also expected to increase due in large part to the growth of the Hispanic population which tend to be disproportionately renters.
