Housing: Rent prices rose at the fastest pace since 1986 in June

Yahoo Finance's Ronda Lee joins the Live show to discuss the rapid rise in rent prices.

Video Transcript


- Rents rose at the fastest pace since 1986 last month. That's according to the latest inflation data. In Manhattan, a condo could cost you over $5,000. Joining us with more on the state of the rental market is Yahoo Finance's Ronda Lee. Ronda, prices across the board, not just in Manhattan, creeping up a little bit, are they not?

RONDA LEE: You talked about the domino effect. And one of the things that reports have shown is there's a correlation between home sale prices and rents. And in places like New York City, San Francisco, and LA, you're going to probably see a little bit higher increase than over the nation because you have the tech sector, financial sector, and you have the international investors that drive up the price. So it's not looking good for renters, particularly in those areas. But in general, all renters are feeling a crunch.

- And Ronda, a lot of this is also an inventory story. I mean, we have heard anecdotally in New York City, for example, a lot of apartments being rented out, sight unseen, sort of what we saw with the housing market over the last few years. And what does that suggest in terms of how elevated these prices remain given that the inventory isn't necessarily easing up?

RONDA LEE: So New York is a tricky market. New York is one of those markets where people will rent a 300-square-foot place for God knows crazy amount. So what's happening is the inventory that they're making it is for high-end inventory. So for people who are not in that thing, they are probably moving further out in the suburbs and stuff.

Right now, the crunch is still going to be there in, like I said, in those major metro markets like New York, LA, San Francisco. Other areas, they're going to see an increase in price, but their inventory might be a little bit better, although there doesn't seem to be an ease-up because we're going to have property taxes start to come out pretty soon from all of these high prices, and that's going to be something that landlords are going to pass on to renters. So we're probably going to see a continued increase throughout the year.

- Not a positive outlook at all. Yahoo Finance's Ronda Lee, thanks so much for the breakdown there.