A wave of evictions could mean more options for homebuyers, but fewer rental properties on the market.
Today, the Supreme Court lifted the Biden administration’s eviction moratorium, declaring that it is almost certain the Centers for Disease Control exceeded their authority by imposing it.
The ruling exposes millions of Americans who are late on their rent to the possibility of eviction, and could impact an estimated 3.6 million households.
It is unclear exactly how many evictions will take place. Many local governments have their own eviction moratoriums in place. Some landlords may decide instead to work out repayment plans with their tenants rather than risk their property sitting empty.
But if evictions do happen, the booming housing market could be impacted by an influx of new properties.
Right now there are more prospective home buyers than there are homes for sale, which has forced home and rent prices high. Despite a recent cooldown, there are still many potential buyers scouring the market.
“Based on what we are seeing with single-family rental homes, the various eviction moratoria over the past year have likely contributed to the supply challenges in the market,” said David Howard, executive director of the National Rental Home Council, a trade group that represents landlords who own single-family homes.
Survey data from the National Rental Home Council shows that 23% of individual single-family rental homeowners planned to sell at least one property as a result of the various eviction moratoria. With the moratorium lifted, the sales of properties once occupied by evicted tenants could create opportunities for home buyers, and former rentals could come off the market.
Some are already selling to large investment firms with plans to keep them as rentals but raise prices, making them unaffordable for the recently evicted looking for new homes.
This could put pressure on the rental market, which is already seeing huge demand increases. In July, rents rose 7% year over year for one-bedroom apartments and 8.7% for two-bedroom apartments. Single-family rentals are also experiencing a surge in demand.
Housing advocates are pushing for Congress to use funds from the recent budget resolution to address affordable housing. The Senate’s version of the budget resolution calls for spending $332 billion on housing and transportation initiatives, including combating “underbuilding” through the National Housing Trust Fund.