“A lasting fallout from the Great Recession has been a sharp rise in the number of Americans who are renting rather than owning their homes. Sky-high real estate costs, financial insecurity and job instability have pushed many people out of the home-buying market and into rental units, especially in large cities. Following supply and demand, the increase in renters has come with an increase in rental prices. Those prices have eased a bit in the last several months, but there is a disturbing trend in the numbers: Rents for the most expensive places are declining while rents for cheaper places are rising, adversely affecting those on the lower end of the income scale.
The Knowledge@Wharton radio show, which airs on Wharton Business Radio on SiriusXM, invited three experts to explain what’s happening in the rental market. Benjamin Keys is a real estate professor at Wharton and a fellow at the National Bureau of Economic Research; Aaron Terrazas is a senior economist at Zillow; and Jenny Schuetz is a fellow in the Metropolitan Policy Program at the Brookings Institution. The following are key points from their conversation.”