Rent and mortgages have been high for years. Could slowing inflation help fix it?

Everything is expensive. Your groceries, the gas for your car, utilities like gas and electricity — there are plenty of reasons you may have contemplated running away into the woods the last time you checked your bank account.

But for most people, the biggest monthly expense is housing. And while the cost of your rent or mortgage is a longstanding issue, the sky-high housing prices we've seen since the start of the COVID-19 pandemic haven't made it any easier to afford homes.

So what gives?

Is inflation the reason my rent/mortgage is so high?

Sort of.

Housing is notoriously tough to afford in most major cities. Zumper, a real estate company that also collects data on housing prices, found that the median rent price for a one-bedroom in Washington, D.C., was $2,330 on average in November 2023. That made D.C. the ninth-most expensive American city in which to rent a home of that size.

Zillow also tracks data on rental prices, and uses what it calls the Zillow Observed Rent Index to track the "typical rent" in an area. It's an average, adjusted to keep expensive properties from weighting the number up, of all the rental properties in a given area.

For D.C., that index was $2,269 as of January 2024.

The problem of high rents came to a head after the deepest part of the pandemic ended. A glut of work-from-home employees who were no longer tied to a physical office then chose to move around the country. Most cities weren't prepared with enough empty houses and apartments to handle the surge in demand, driving prices up.

Then add our old friends ... enemies ... frenemies — inflation and supply chain disruption — to the cost of building materials, and we have a problem.

Now, rent spikes do seem to be improving finally in some U.S. cities, according to Zumper, as renters stop relocating and a housing surplus looks like it may force prices down.

But the problem of high housing costs for both buyers and renters started long before the work-from-home reshuffle. Back in 2018, then U.S. Rep.-elect Alexandria Ocasio-Cortez notoriously couldn't afford an apartment in D.C. on her bartender salary and was waiting to move to the District until her congressional salary kicked in.

And that's just when it comes to rent. High interest rates on mortgages, put in place to combat high inflation, made it more expensive to buy a home than the already expensive, pre-pandemic starting point.

Even worse, those problems feed into each other. According to Bankrate, the high cost of buying a home was one of the largest contributors to the Bureau of Labor Statistics' all-items Consumer Price Index (CPI) in December. The CPI is one way to measure inflation, which is contributing to those high home prices in the first place.

But that hasn't been affecting all U.S. workers the same way.

We're all experiencing the housing market — and the economy — differently

Just as inflation and sluggish wage growth hit young workers and low-income earners harder than other groups, the issues of high rent and high mortgage rates are uneven.

For example, at the same time that so many people are struggling to afford housing, the U.S. saw its highest-ever share of Americans who own a home without a mortgage. In D.C., the U.S. Census Bureau estimates that around 7,000 more people in D.C. lived in a home they owned mortgage-free in 2022 than in 2010.

Young people entering a strong job market amid unaffordable home prices are experiencing the economy differently than their parents or even those just a half-generation older.

"Buying the first house is a very difficult proposition," said Ron Hill, a marketing professor at American University. "And you look at what [young peoples'] incomes are and you look at the price of housing in Washington D.C. -- it's incredibly different than when I first bought my first house in Washington DC in 1985... They're looking at multiples of their income that make it almost intolerable to think about it."

Those who were old enough, and had saved enough, to buy a home before the 2008 recession benefitted from easy-to-obtain loans at the time, according to the Washington Post. Then, with low interest rates during the recession, "many borrowers were able to switch into shorter-term mortgages without jacking up their monthly payments, allowing them to pay off their loans at an accelerated rate," Bloomberg reports.

In the same period, real estate prices rose for everyone yet to buy a house, and loans became more difficult to get, especially for people with lower credit scores, the Post reports. That change in the housing market moved the finish line for people who began later.

There's no one perfect way to describe the way the economy is going for so many groups being affected in such wildly different ways — so it's no wonder we all feel a little bewildered. It's part of the same problem puzzling President Joe Biden as he trots positive economic metrics in front of an apathetic voting public before the general election.

Hill said the future "is always uncertain," but certain statistics point to continued housing struggles for buyers in the next five to ten years.

"What we know is that prices continue to rise over time in the aggregate, with some areas increasing at a faster rate, while others may even decrease," Hill said in an emailed statement. "Still, the wages of middle class and working-class consumers are not rising at the same rate as professional class consumers, and no one is outdistancing the top 5% who own most of the national wealth."

"Thus, most of the country (about 60% or so) will struggle even more to buy in the future unless creative options (not financing) are available or there is a return of better paying jobs that do not require college," a proposition Hill called "unlikely."

Still, the federal government, and some localities, are working to address the longstanding issue.

Arlington County, for example, passed its "Missing Middle" plan last March to allow developers to build multiple units on a single family lot, creating more opportunities to build homes. Alexandria debated a similar plan back in September, and voted to end single-family-only zoning in November.

Last July, the Department of Housing and Urban Development took steps aimed at increasing the supply of affordable housing while also bolstering protections for renters. $85 million in funding was given to communities across the U.S., to reduce barriers to affordable housing, such as zoning restrictions that in some places have become a hurdle to increasing the supply and density of affordable housing.

The Associated Press, News4's Digital Managing Editor Carissa DiMargo and Consumer Reporter Susan Hogan contributed to this report.