ALBUQUERQUE, N.M. (KRQE) – Apartments rents are at an all-time high, as rates in some cases have risen by nearly 22% in the last year. “So the problem is, is this is you know, you know, the apartments and rental facilities are able to do this because demand is so high,” said Reilly White, Associate Professor of Finance at the University of New Mexico.
The increase in monthly rates is making it hard for some to find affordable apartments and the numbers are leaving people shocked. “So we have a large number of factors at play here that are helping to drive those prices onward in Skyward,” said White.
A two-bedroom apartment, the average cost in New Mexico, is $1,400 a month which is up 22% from last year. In Albuquerque the average rent for a two-bedroom is $1,100 and the prices are comparable to cities in other states.
Compared to Phoenix which is 400 dollars more, but we are about the same price as El Paso, Oklahoma city and Tucson.
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The higher prices start with one thing. “[Houses are in] very low supply, the lack of people willing to put their homes up for sale, held to increase the price of homes,” said White.
New Mexico did not see a boom in population this last year according to the U.S. Census, so why the lack of supply? After the pandemic hit, the housing market saw homes being bought at record prices in the metro, now those who want to buy are being priced out because the price of homes and the down payment for the loan resulting in many renting.
Salaries in New Mexico are up year to year. Apartment complexes know tenants can pay more for units so prices go up, though it’s not the case for everyone. Lisa Huval, Deputy Director of Housing, with the city of Albuquerque, said, “It’s harder for folks to find rental units that are affordable, the units that are available, it’s very competitive.”
The city says Albuquerque needs close to 30,000 units to help those making less than the median income. Experts believe it’s simply a waiting game. “Price increases like this are temporary, it is often timing and a lot of things that will happen which are out of your control. And so accept all of these things, do the best you can and keep searching out there,” said White.
Supply chain issues, cost of materials, and inflation have also affected the housing and apartment market making it less affordable to build new homes and complexes.