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If income has raised by 20%, why should you expect rent to also increase by the same amount?
by arming9513 3y ago
If income has raised by 20%, why should you expect rent to also increase by the same amount?
- jeffbee 3y agoBecause it's a market operating point set by supply and demand. Increasing incomes support demand and raise prices.
- Eisenstein 3y agoWhy do increasing incomes support demand? I am not going to move to another place exactly the same just because I make more money. In order for prices to increase, I would have to be moving into a better place than I am in now, which means it would cost more anyway. Me moving laterally gives me no utility.
- jeffbee 3y agoIn the American rental market, for most lessees, the lessor can raise the price an arbitrary amount periodically. This is true for virtually all tenancies in this country.
- Eisenstein 3y agoSounds like that isn't a market force if they do it without demand changing.
- Dylan16807 3y agoIf "support demand" means people want better homes, then that's fine. If people are spending more real money to get the same housing, something has gone wrong.