The Sticky Question of Whether Households Can Afford Today’s Sky-High Rents

Cushman & Wakefield listed a number of critical CRE questions as it looked at the uncertainty that is the opening of 2023. One of them was, “Can households afford today’s sky-high rents?” But the answers don’t necessarily comport with some other views of the question.

“Home prices have already started to decline, but for the market to return to the historical spread between rents and mortgage payments, home prices would need to fall by more than 25%,” the firm noted. “That decline would be more than home prices fell during the Great Financial Crisis (19.8%), insulating apartment demand from further erosion from the single-family market.”