Younger generations are getting their taste of an inflationary environment, and so far, when it comes to the cost of services, it’s not as sour as it is to those who are older.
Those who signed new leases in December found their cost of goods and services increased 5.6% and 6.1%, respectively, compared with a 6.5% for typical Americans.
This also marks the first time since the start of 2021 that Gen Zers overall have a lower personal inflation rate than the U.S. population, according to a recent report from real estate brokerage Redfin.
The shift was largely due to rental price growth slowing after most all experienced huge spikes last year.
This is the first time that asking rents have posted a smaller increase than the overall cost of housing in a year and a half, Redfin said.
The personal inflation rate for Gen Zers overall, taking both renters and homeowners into account, came in at 6.4% in December. Millennials, at 6.8%, still have a higher rate than the general population.
Better Deals for Those Who Move Now
Ebbing price growth means renters moving now may be getting a better deal than those who signed a new lease in late 2021 or 2022, Redfin senior economist Sheharyar Bokhari said in prepared remarks.
“Those who are on the fence about continuing to rent or buying their first home may also benefit from waiting a few months before locking in a new lease.
“If mortgage rates and home prices continue dropping from their peak, entering the housing market will be more affordable than it is today. Depending on individual circumstances, which could shift the math on whether renting or buying makes more financial sense.”
A Time to Negotiate with Landlords
Asking rents have dropped from the apex reached last summer, and they’ve fallen from a year ago in many parts of the country, including Phoenix, Austin, and Los Angeles, according to Redfin.
“People looking to move now may also want to take advantage of declining demand and negotiate with landlords about perks like free parking or a free month’s rent–and those who are staying put may have some bargaining power when renewing their lease,” Bokhari said.
“Rental prices are likely to fall from here nearly everywhere in the country, so it may also be worth waiting a few months if you’re not in a hurry to sign a new lease.”