Tag: renting

5 ways young Canadians can prepare financially for what awaits in 2024 – MoneySense

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3. Food prices will rise, but at a slower pace

Compared to previous years, food prices should stabilize in 2024. However, keeping your kitchen stocked will still keep your grocery bill high. According to Canada’s Food Price Report 2024, overall food prices are expected to increase by 2.5% to 4.5% over the course of next year (whereas food inflation jumped by 4.7% in November 2023). So, if you’re a single adult who spent roughly $375 on food per month this year, you can expect to shell out from $385 to $392 monthly by the end of 2024.

The Food Price Report suggests that you can expect baked goods, vegetables and meats to take a big bite out of your budget. However, you’ll get some relief with canned goods and dried pasta. The good news is that food prices will increase at a more gradual pace than in 2023.

What you can do: Consider meal planning

During the pandemic, I started meal planning as a strategy to deal with grocery costs. It’s been helpful in ensuring that our family stays within our food budget and doesn’t fall into the temptation to order takeout. Meal planning consists of deciding what you will eat for the upcoming week and then adding only the ingredients you need to your grocery list.

Personally, I like to make extra lunch portions when preparing dinner, which helps cut back on costs. Another option is to buy items in bulk when they go on sale and then divvy them up into smaller quantities and store them in the freezer. This works well for sliced fruits, vegetables, meats and seafood.

4. Consumer debt will continue to grow

Gen Z will continue to face financial pressure in 2024, so managing debt will become even more important. Between Q3 2022 and Q3 2023, the average credit card balance in Canada increased by 9%, according to TransUnion Canada. The increase was fueled by an increase in the cost of living and the cost of credit, thanks to higher interest rates. Unless the Bank of Canada starts reducing interest rates and daily living expenses start to come down, it’s likely that debt will continue to grow in 2024.

What you can do: Start a side hustle to pay off debt

To become financially secure, 40% of Gen Z are interested in generating more sources of income, such as starting a side hustle, according to a BMO survey. Considering there’s only so much you can do to cut expenses, you might want to consider growing your income so you can more easily pay down your debt.

Once you have some disposable income, prioritize paying off high-interest debt, such as credit card debt, which can help to squash your debt load. If you’re carrying a monthly balance, call your credit card provider and ask if they can lower the interest rate. If you’re fresh out of school and borrowed money to pay for your studies, it’s a good idea to focus on repaying your student loans.

5. Travel will rebound in spite of high travel costs

Despite rising travel costs, young travellers are eager to escape the daily grind. Many young people would rather spend their hard-earned money on experiences instead of goods. Regardless of being in a tight financial situation, 2024 may be the year many Gen Z make their dream vacations happen.

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Sandy Yong

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December 29, 2023
Mum fears she may be homeless by new year as rent DOUBLED days before Christmas

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AN AUSTRALIAN single mum says she could lose her home by New Year’s day after was rent was more than doubled just days before Christmas.

Jakki Brooking, 28, now fears homelessness as her landlords increased her weekly rent from £230 to £500 from January 1, 2024.

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Single mum Jakki is in the verge of homlessness after her rent got increased by more than doubleCredit: TikTok / @jakkibrooking

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She began her emotional video by revealing the harsh reality she’s facingCredit: TikTok / @jakkibrooking

In an emotional TikTok video, the nurse spoke about her dire situation after living in the rental home for more than six years.

Jakki explained she was able to pay a lower rent as her property was, until recently, a part of the National Rental Affordability Scheme (NRAS), aimed at reducing rental costs for low-income earners.

She was paying some 20 per cent less rent than the average market rental prices.

However, her property was bought by new owners who decided to delist the property from the government scheme and put it up on open rental market to attract hire prices.

Her new lease, which is set to start at the beginning of next year, will have an increased rent amount which is more than double than what she is currently paying.

A teary Jakki expressed in the TikTok video: “I obviously can’t afford to pay that …I feel so stupid doing this [making video].

“My lease is up on the 1st of January, I’ve applied to houses and been rejected for all of them.

“I just don’t know what I’m meant to do now. This is literally so embarrassing.

“I am facing homelessness from the end of the lease.”

The limited availability of NRAS properties complicated her search, leaving her stuck between being a low-income existing tenant and not meeting the criteria as a new tenant.

Jakki also said she reached out to her real-estate agent explaining her precarious situation and the looming threat of homelessness.

But the agent, in return, threatened her with legal action if she did not vacate the property by the end of her tenancy.

Jakki turned to her audience, asking for suggestions.

She added: “I just don’t know what I’m meant to do now.

“This is literally so embarrassing.”

One of her viewers commented: “Working was an registered nurse means you should be able to afford rent easily! What is this world coming to? I’m so sorry.”

Another added: “The housing in Australia is ridiculous, no one should be paying $600 a week to live in a house.”

Jakki revealed she has since found a place for her son, Levi, and her cat and dog to stay while she examines her options.

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Sayan Bose

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December 25, 2023
Say what?! 5 financial buzzwords we kept hearing in 2023 – MoneySense

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1. Quiet hiring

First, there was the trend of “quiet quitting”: a disgruntled employee doing the bare minimum required for their role. Then there was “quiet firing”: an employer reducing a worker’s duties and training, subtly nudging them to quit. And then, in 2023, we saw the rise of “quiet hiring”: an employer looking to its existing employees to fill a skills gap or take on more responsibilities, rather than hiring someone new. Quiet hiring is typically a cost-cutting or cost-saving measure, but it can also be an opportunity for a staffer who wants to try something new, move up to a new role or stack their case to ask for a raise. Quiet hiring can also refer to outsourcing work to short-term contractors instead of hiring new workers. —Jaclyn Law

2. Soft saving

Facing high inflation, high interest rates, expensive housing and mounting debt, many young people are unsure if they’ll ever be able to retire. So, many Gen Zers are rejecting aggressive saving (see: the FIRE movement) and embracing “soft living”—prioritizing things like comfort, balance, personal growth and wellness. “Soft saving” is part of that. It’s a lower-stress approach to personal finance and investing that focuses on the present. That doesn’t mean Gen Z is spending recklessly—but some might see saving for retirement as more of a nice-to-have than a need. —J.L.

Recommended savings reads

3. Inflation isolation

Is inflation dampening your social life? A November 2023 Ipsos poll found that the rising cost of living is causing “inflation isolation.” Half of Canadians are staying at home more often, and a third of us are socializing less to avoid spending money. As a result, 20% of us are feeling isolated. Pretty bleak, right? Plus, those of us who are struggling with debt are more likely to feel stress and anxiety, as well as cut back on seeing friends and family. If you’re experiencing feelings of anxiety, stress or depression, read our guide to finding free and low-cost mental health resources in Canada. —Margaret Montgomery

Recommended inflation reads

4. Housing-market nepo baby

When I first saw this term in a recent Wealthsimple newsletter, I couldn’t help but laugh… and then I wanted to cry. “Nepo baby” refers to the child of a celebrity who has benefited from their parent’s success, wealth and name recognition. A nepo home buyer in Canada is someone whose parents already own a home and can help their kids afford a down payment for a home, according to some sources. Statistics Canada reports that “in 2021, the adult children (millennial and Generation Z tax filers born in the 1990s) of homeowners were twice as likely to own a home as those of non-homeowners.” Adult children whose parents owned multiple properties were three times as likely to own a home than those whose parents were non-home owners. —M.M.

Recommended real estate and mortgage reads

5. Recession core

Move over, minimalism—recession core is here. Yep, that’s right, there’s a whole aesthetic inspired by living in a recession. Basically, this means going back to simpler styles and using items already in your wardrobe. Look, I get it. Minimalism might actually require you to spend lots of money on “clean” and refined-looking items, so that’s out of the question for many right now. Instead, many of us are looking for greater value when we shop—a habit that could pay off even after the economy improves. —M.M.

Recommended thrifty reads

We can think of several more financial buzzwords that were popular this year, from “tip-flation” to “funflation.” Will they still be talked about in 2024, or will they go the way of “YOLO,” “the new normal” and “The Great Resignation”? Only time will tell. We want to know which trendy money words you love and hate. Share your picks in the comments below, and then boost your financial vocabulary by checking out the MoneySense Glossary.

More about financial literacy:

About Margaret Montgomery

Margaret Montgomery is MoneySense’s editorial assistant and MoneyFlex columnist. She studied business administration at Wilfrid Laurier University and journalism at Centennial College.

About Jaclyn Law

Jaclyn Law is MoneySense’s managing editor. She has worked in Canadian media for over 20 years, including editor roles at Chatelaine and Abilities and freelancing for The Globe and Mail, Report on Business, Profit, Reader’s Digest and more. She completed the Canadian Securities Course in 2022.

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Margaret Montgomery

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December 20, 2023
Renting vs. owning: Can you be financially secure without buying a home? – MoneySense

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I don’t expect real estate prices to rise at the same 6.75% rate we have seen over the past 10 years, so instead, let’s say prices rise at 4% per year. Some people may think that number is high, while others may think it is low. But if you look back at U.S. residential real estate appreciation since 1890, which looks to be similar here in Canada, prices have only risen by a bit more than the rate of inflation, so even 4% may be generous. Nevertheless, assuming 4% growth is correct, the condo would be worth $740,122 after 10 years. Home equity, representing the condo’s value minus the mortgage balance, would be $471,613.

What if someone could rent the same $500,000 condo for $2,000 per month (a number that might seem high or low depending on where you live)? Compared to making monthly mortgage payments on that same property, the renter would be saving $559 per month. Their rent would rise over time, say, at 2% per year, so the $599 per month of savings would decrease over time.

Now, let’s say they invested their initial $100,000 (the amount that would have been used on a down payment) and $559 a month (a number that would decrease as rent increased) into a tax-free savings account (TFSA). If they earned 4% per year on their investment, they would have $204,396 after 10 years. The buyer, with $471,613 of home equity, is clearly better off than the renter, right?

The problem here is you cannot just compare the mortgage payment to the monthly rent. Owning has other incremental costs that might include:

Property tax: $200 monthly (not ap
Condo insurance: $10 or more per month, compared to tenant insurance
Condo fees or repairs: $500 more per month, compared to renting

Property tax rates can vary significantly depending on where you live. And condo fees and repairs can vary, depending on the age and amenities in the building. But if we added another $710 per month from the categories above to the renter’s monthly investment deposits, the renter would have $319,117 accumulated after 10 years. The same tax-free TFSA return of 4% is assumed, perhaps in their spouse’s TFSA.

The owner would still have 471,613 in home equity. So, owning is still better than renting, right?

Let’s not forget there are costs to buy and sell real estate. It could cost $10,000 in land transfer tax, legal fees and other costs to buy, and another $40,000 to sell after 10 years. If the renter added these amounts to their investments, they would be at $373,919. The buyer is still ahead of the renter with $471,613, but as you can see, the gap is closer.

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Jason Heath, CFP

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November 29, 2023
‘To buy or not to buy, that is the question’: BofA reveals rent is cheaper than mortgages in all but two of 97 major metros

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This housing market has Bank of America economists in a Shakespearean mood about the eternal debate: The slings and arrows of buying versus renting. In a recently released Hamlet-esque research note, “To buy or not to buy, that is the question,” BofA economists found that buying, to paraphrase the prince of Denmark, is an outrageous fortune these days.

Mortgage rates have created a sea of troubles for homebuyers, hitting the once-unthinkable 8% mark before falling for weeks in the wake of cooler-than-expected inflation reports and the prospect of an end to the Federal Reserve’s rate hiking cycle. While that’s nobler in the mind in terms of affordability, home prices have still risen substantially in just three years, and consumers don’t think it’s a good time to buy, the economists said, citing a University of Michigan consumer sentiment survey. The economists also suggested that buyers should anticipate the undiscovered country of a higher-for-longer rate environment (echoing other investment banks who have said as much.)

At the same time, rents have gone up substantially as well—only recently has rent growth slowed as the rental market softens. “It clearly has not been a buyers’ market due to low affordability, but the situation has not been all that much better in the rental market,” they wrote in the note.

‘Rent was still cheaper than mortgages in all but two’

The BofA economists took a look at the rent versus buy conundrum, comparing rent and mortgage payments (they included property taxes in their calculation, but excluded home insurance, utilities and maintenance costs). Nonetheless, their analysis found that “rent was still cheaper than mortgages in all but two of 97 major Metro Areas,” as of October, despite the fact that both rents and mortgage payments have gotten more expensive, relative to median income, since the pandemic. It’s not hard to understand this, given that the whips and scorns of the pandemic let millions perchance dream of a different way of life—and a different housing situation, sending home prices up more than 40% nationwide and fueling a rent spike that has settled down faster than the buying market.

There’s the rub: It’s worse in some places than others. Along the west coast, economists found it more expensive to purchase a home than rent in cities like Los Angeles, where as a percentage of median income, mortgage payments and tax are 83% and rent is 41%; or San Jose, where it’s 80% versus 26%; or San Francisco, where it’s 71% versus 29%; or San Diego, where it’s 74% versus 38%; or Seattle, where it’s 55% versus 25%.

But there’s also cities like New York, where it’s 62% versus 43%. Meanwhile, New Orleans and Jackson, Mississippi, are the only two cities that are less expensive to buy than rent, according to their analysis.

Realtor.com’s recent rental report, published in late-October, found that for the fifth straight month, rents dropped. “It’s become more economical to rent than to buy in nearly all major markets,” Danielle Hale, chief economist at Realtor.com, said in a statement, at the time. An earlier report showed the cost of buying a starter home was significantly more expensive on a month-to-month basis than the cost of renting a similar-size home; that was true in 47 of the top 50 metros.

The equity question

But then BofA’s pale cast of thought turns to the question of equity. When you buy a home, you build equity over time, all the while the value of your home appreciates. Your home becomes a sort of cash reserve into which you can tap. None of that is true for renting, but that doesn’t mean it’s not a viable option, particularly at this moment.

“A similar story applies to the United States as a whole,” they wrote. “Despite the costs of renting and homeownership both increasing, renting is more affordable than owning. On a national basis, rents have increased from 23% to 26% of median U.S. household income, while the ratio of mortgage payments to income has grown from 19% to 32%.”

The data suggests a housing market that has become “more burdensome” on the average buyer than pre-pandemic—one that’ll take some time before achieving a balance between supply and demand. The investment bank expects the Fed to cut rates next year, and after, they wrote, housing activity should pick up amid improved demand and supply. That being said, the economists expect both existing home sales (which are at their slowest pace in over a decade) and new home sales to “warm up” in the second half of next year, along with more building to support housing starts. In other words, BofA is betting against conscience making (housing) cowards of us all.

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Alena Botros, Nick Lichtenberg

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November 25, 2023
6 Ways to Make Passive Income Through Rental Properties | Entrepreneur

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Opinions expressed by Entrepreneur contributors are their own.

One of the oldest and easiest ways to create passive income is through rental properties. Luckily for investors and entrepreneurs, the property rental market remains strong and continues to grow. Based on data from the U.S. Census Bureau, more than 35% of households in the U.S. rent homes. Additionally, RentCafe reported that multifamily construction in 2022 reached a 50-year high nationwide, and according to Axios, “one million rental units are slated for completion through 2025.”

Additionally, a recent GoBankingRates survey revealed that 14% of Americans don’t believe they will ever be able to afford a home, and 27% have no interest in buying a home, contributing to the demand for rental housing options. This is due to a variety of factors, including a low inventory of homes for purchase, barriers to homeownership such as high prices and high-interest rates, and a growing nomadic workforce that doesn’t want to be tied down to one location.

Although rents appear to be stabilizing, demand for rental properties is still high and on-time rental collection rates recently rose above pre-pandemic levels. That means now may be a good time to rent out property, which may be easier than you think.

Here are six types of rental properties that can help you earn passive income and even begin building generational wealth.

1. Traditional investment properties

Traditional investment properties have long been a popular choice for those seeking to generate passive income through rentals. It’s a rather simple concept: purchase a property, find tenants to rent it out and collect monthly rental income. Investors have the opportunity to decide whether to invest in long-term, mid-term, or short-term (vacation) rentals.

Long-term rentals offer stability in rental rates and cash flow with a reduced risk of vacancies, while vacation rentals and short-term stays allow for higher rental rates with a higher risk of vacancies. Vacation rentals are also less passive, requiring more work to clean and ready the property in between stays and find tenants on a much more frequent basis. But the returns on investment can be much higher.

There’s also a “mid-term rental” investment option, where the lease lasts for more than one month but less than one year (college student housing would fit into this category). Mid-term rentals require a bigger time investment than long-term properties but aren’t as demanding as short-term rentals. Some investors may want to diversify their rental property portfolio by owning a mixture of long-term, mid-term, and short-term rental properties, while others may commit to whichever style best suits their preferences.

2. The accidental rental

Investing in a new property isn’t always necessary to become a rental property entrepreneur. There are instances where you may already own extra property, such as a vacation home, a newly inherited property or perhaps you recently got married and both you and your spouse own your own home. Instead of selling these extra properties, you may consider renting them out.

Sometimes, it’s more beneficial to hold on to a property over the long term rather than collecting a quick payout. Retaining properties for rental purposes cannot only help you build more real estate equity, but it can bring in a significant amount of passive income as well (and you may benefit from tax savings, but consult a tax professional on that). Combining the extra income with long-term equity gains can contribute to building generational wealth.

3. House hacking

Another strategy that has gained traction in recent years is “house hacking.” House hacking involves renting out a portion of your own home. If you own or purchase a property that is bigger than your housing needs, and you’re looking for a way to earn some extra cash, rent out a room (or several rooms).

House hacking allows you to significantly reduce or eliminate your own housing expenses by using the rental income from renting out extra rooms to help pay down your mortgage and/or offset utilities and other costs of homeownership. House hacking can be a great way to start building passive income without the need for a large initial investment.

4. Built-for-rent

A growing trend in real estate is the “built-for-rent” market. Built-for-rent homes are built by companies that specifically design their properties for rental purposes only. These properties are often strategically located in desirable areas, ensuring high demand and consistent occupancy rates, and are marketed to people looking to maximize their returns on investment in the real estate industry.

Investing in built-for-rent properties has become one of the most lucrative ways to generate a steady stream of passive income. By purchasing residential properties specifically designed for rental purposes, you can benefit from a consistent monthly income with minimal involvement. Typically, the built-for-rent company handles all aspects of property management, including finding tenants, handling maintenance and repairs, and collecting rent. This enables you to sit back and enjoy your rental income without the stress and time commitment associated with traditional real estate investments.

5. Mixed-use properties

A mixed-use property is a real estate asset that combines both commercial and residential spaces. This provides a unique opportunity to rent out both residential and commercial units. Leveraging the potential of these properties can lead to a sustainable and reliable passive income source, but there are several strategies to consider.

One effective strategy for generating passive income through mixed-use properties is maximizing rental yields. This can be achieved by strategically curating a mix of commercial and residential tenants that complement each other. For example, having a retail shop on the ground floor of a residential building can attract more tenants and increase rental demand.

Another strategy is to focus on choosing the right location for your mixed-use property by conducting thorough market research to identify the most profitable locations. For example, investing in areas with strong growth potential, high foot traffic, and a good mix of commercial and residential demand can increase the value and attractiveness of your property.

In addition, look for other shared space opportunities like coworking spaces that provide short-term or flexible rental options that cater to the evolving and increasingly nomadic habits of modern workers. By taking an innovative approach to offering mixed-use rental spaces, you can tap into a variety of rental markets and maximize their passive income potential.

6. Storage units

When you think of rental properties, storage units usually don’t come to mind. However, renting out storage space can also generate passive income streams. There is a high demand for storage space, and fulfilling this need can help you earn money effortlessly by maximizing unused space. In addition to renting out traditional storage units, people can also rent out space in garages, basements, attics, and spare rooms. By getting creative and marketing effectively, you can effectively turn your empty spaces into profitable assets.

Regardless of what kind of property you decide to rent out, technological advancements have streamlined property management, making it a more efficient and attractive endeavor. Property management tools and software automate many routine, time-consuming tasks such as listings, tenant screening, rent collection, and maintenance requests. This means you can spend less time on administrative duties and focus more on more important life activities, all while maximizing your passive income.

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Ryan Barone

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October 20, 2023
What to Know When Leasing a New or Existing Space | Entrepreneur

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Opinions expressed by Entrepreneur contributors are their own.

When leasing commercial space, a tenant can either rent in a new development or lease an existing space.

Understanding the plusses and minuses of leasing new space compared to an existing space is critical. There are an incredible amount of nuances involved in both options. This article will help you examine both sides of the equation to assist you in making an informed decision.

Infrastructure improvements

Key benefits businesses can enjoy when leasing space in a new development are a few potential infrastructure improvements from landlords. These can include electrical & HVAC.

Many developers are building spaces with higher electrical requirements than what was traditionally built in the past. Since upgrading the existing electrical infrastructure can often be impossible or extremely expensive, having the amperage you need from the beginning will be highly advantageous to select a location.

After electrical requirements, HVAC is another big-ticket item. In a new development, the landlord may have installed a new HVAC. However, there is also a chance that the landlord will not install it. Whether the development is new or existing, you need to ask and get in writing if the landlord will handle the HVAC. You will need to know this before you start to negotiate your deal.

Also, you must determine the HVAC size and confirm with your general contractor that it will work for your business. Remember to mention to your general contractor any equipment you will be utilizing and ask your general contractor to confirm the HVAC tonnage will be sufficient for your needs.

If new HVAC is going to be installed by the landlord, find out if they will be distributing it or not. If they will not be distributing the HVAC, make sure to let your general contractor know and have the g include the cost to distribute in their quote. If there is existing HVAC, find out the age and have it inspected in the early stage of negotiations. If the HVAC needs to be replaced, you must find out sooner rather than later.

Related: The 10-Step Process to Leasing a Commercial Space

Tenant improvement allowance

A tenant improvement allowance is money a landlord gives a tenant specifically for the tenant to utilize in building out their space. New developments often offer tenants a higher tenant improvement allowance than an existing space. However, it is essential to note that although the tenant improvement allowance is higher, landlords typically will not build a restroom in the new space. Instead, landlords commonly feel that the tenant can add the bathroom to their plans.

Landlords typically expect tenants to take part of the money they give as tenant improvement allowance for the restroom build-out. Therefore, it is a good idea to talk to a general contractor and get a bid on what it will cost to build your restroom. Then you can provide the landlord with that number and try to negotiate restroom credit. Also, remember that it is essential to check with the city to determine the number of restrooms you will need for your use.

Higher leasing costs

One of the main disadvantages of leasing retail or commercial space in a new development is that it can be more expensive. New developments often have higher leasing costs due to the current construction costs. In the Southern California commercial real estate market where I specialize, I have seen examples of rents being double for a new development versus an existing center. In addition to higher leasing costs, tenants often must pay utility connection fees when leasing a new development.

If the space already exists, it is likely connected to utilities, and thus the tenant would avoid those fees. However, it is essential to note that every use differs, and every municipality charges different connection fees. Therefore, do your homework in advance, talk to your potential landlord, and then speak to the municipality where you plan to open your business. It will help if you find out what your fees will be in advance. This way, you will have no surprises.

Related: 5 Most Common Red Flags Entrepreneurs Should Know Before Signing a Commercial Real Estate Lease in New York

Signage

Signage is vital to most businesses — it will get customers to your door. Since signage is highly sought after by all tenants, it can be highly competitive to get. Landlords will traditionally not offer it to tenants. Tenants need to work hard to get signage rights with their space. Typically you can easily get the right to put your name above your space. You must negotiate to get your business name on other building locations, such as the back and the side. Additionally, you must negotiate your rights to be on any pylon and monument signs in the shopping center or business complex.

Remember that there are almost always limited spaces on monuments and pylon signs. All tenants in the center are probably not going to get panels. When negotiating your deal, you will need to ask for space. Remember to get the exact location of the panel location in your lease. It will need to be added as an exhibit.

Even if a landlord says you can have signage rights, you have no rights if it is not in your lease. At any time, the landlord can force you to remove your sign.

Additionally, it is good to note that in an existing center, a tenant will typically have to pay for the cost and installation of their panel. However, in a new center, in addition to the cost and installation of their panels, landlords often try to pass on the cost of the construction of the monument sign to tenants. If you have seen a monument sign in a center with many blank panels, the landlord could have tried to get the tenants to pay for spaces, but the cost was probably prohibitive.

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Roxanne Klein

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May 19, 2023
Inflation and credit-card debt are on the rise, despite a strong job market. Tell us how the economy is affecting you.

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We want to hear from readers who have stories to share about the effects of increasing costs and a changing economy. If you’d like to share your experience, write to readerstories@marketwatch.com. Please include your name and the best way to reach you. A reporter may be in touch.

For many people living in the U.S., these are tough — and confusing — times.

On Friday, the Labor Department reported 263,000 new jobs in November, while the unemployment rate held steady at 3.7%. Layoffs remain low, despite mass job cuts in the tech sector. Average hourly wages have also risen 5.1% in the past year, but still lag behind inflation for many workers. And there were 10.3 million job openings in October — slightly down from the previous month’s 10.7 million.

Some people might see the latest economic data as both challenging and confusing.

After all, the cost of living rose 7.7% on the year in October. The once red-hot housing market is finally cooling, thanks to mortgage rates that have more than doubled over the last year amid the Federal Reserve’s attempts to rein in inflation, and rents, while moderating, have surged from pre-pandemic levels. Borrowing money to cover increased precarity is becoming more expensive too, with the average credit-card APR at 19.2% as of Nov. 30, according to Bankrate.

“‘It’s just mind-boggling, the disconnect that we’ve seen.’”

Given all the conflicting signals, economists say it can be difficult for consumers to know exactly how to feel about the economy right now. “It’s not new, this disparity between the actual facts on the ground about what’s going on in the economy and the sentiment,” said Heidi Shierholz, president of the Economic Policy Institute, a left-leaning think tank.

“I remember this summer it was just unambiguously the strongest jobs recovery we’ve had in decades,” she added. “There’s just absolutely zero chance that we were in a recession — not only were we not in a recession, we were in just an extraordinarily fast recovery — and the polling, a huge share of people actually thought we were in a recession. It’s just mind-boggling, the disconnect that we’ve seen.”

Still, the fact that inflation is eating into people’s savings — and that essential goods like food, energy and housing have spiked in cost — is bound to make many people unhappy.

Struggling to pay for rent and food

“Going into the pandemic, more than seven out of every 10 extremely low-income renters were already spending more than half of their income on rent. And then the pandemic hits; we saw a lot of low-wage workers lose their jobs and see an income decline,” said Andrew Aurand, vice president for research at the National Low Income Housing Coalition. “Then in 2021, we see this huge spike in prices. For a variety of reasons, they’ve struggled for a long time, and since the pandemic, it’s gotten even worse.”

Moderate-income Americans are struggling too. Maybe you can’t afford your favorite family meals, as the price of grocery store and supermarket purchases has jumped by 12.4% from last year. Or maybe you’re putting off a trip to see family this holiday season thanks to the higher cost of airfare, or you’re worried about losing your job as some business leaders warn of a recession. Perhaps you’re forced to rely on credit cards and personal loans, as credit-card debt is up 15% from a year ago.

MarketWatch has chronicled many of these changes, detailing renters’ frustrations, families’ tough choices at the grocery store, and the reality faced by would-be home buyers sidelined by higher rates and dwindling affordability.

But we would like your help telling an ongoing story about the American economy, centering the experiences of everyday people. Our readers know better than anyone about how today’s economic conditions have impacted their daily lives.

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December 2, 2022
Some good news: One key driver of inflation is finally showing signs of easing

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Rent growth is beginning to cool. But it’s descending from a heck of a peak.

Rental prices climbed 7.2% between September 2021 to September of this year, the largest annual increase since 1982, according to consumer price data released Thursday. Overall, shelter costs were also among the most significant drivers in rising consumer prices, along with the cost of food and medical care, the Labor Department said.

Still, it’s not all bad news for tenants. A new report from Realtor.com out Thursday found that nationwide, median rental prices in 50 large metros grew at their slowest annual pace in 16 months in September — at 7.8%. That marked the second consecutive month of single-digit year-over-year growth for 0-2 bedroom properties, and it meant that median asking rents fell by $12 in a month, Realtor.com said.

Housing inflation in the Consumer Price Index lags trends in the rental market, though, meaning the slowdown in rent growth might not register in the data for a while.

While median rental prices are still nearly 23% higher than they were two years ago, they’re no longer climbing at breakneck speeds with no end in sight. These days, economists say, that counts as a silver lining.

“After more than a year of double-digit yearly rent gains and nearly as many months of record-high rents, it’s especially important to see consistency before we confirm a major shift like the recent rental market cool-down,” Realtor.com Chief Economist Danielle Hale said in a statement. “But September data provides that evidence, as national rents continued to pull back from their latest all-time high registered just two months ago.”

“This return of more seasonal norms indicates that rental markets are charting a path back toward a more typical balance between supply and demand, compared to the previous year,” Hale added. “We expect rent growth to keep slowing in the months ahead, partly driven by the impact of inflation on renters’ budgets.”

Affordability, however, is worsening, Realtor.com said. Blame the fact that consumer prices are rising faster than wages.

(Realtor.com is operated by News Corp
NWSA,
+1.64%
subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)

A Redfin
RDFN,
-3.55%
report out Thursday, meanwhile, said rents grew 9% year-over-year in September — the slowest pace since August 2021. Rents were still way up year-over-year in cities like Oklahoma City (24.1%), Pittsburgh (20%), and Indianapolis (17.9%.)

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October 13, 2022