I mean, isn't that obvious? Our global economy isn't just global in a geographical sense. "Economy" goes down, everybody pays.
The average person is out of a job, the landlord has to increase rents, the billionaire is ejected from the Three Commas Club. It's traumatic to everyone.
I personally cannot think of a limit at which I would decide to be homeless. I would much rather have a home to live in than buy any food beyond what sustains me, or get new clothes, or go out for any entertainment reasons. I believe I am not the only one in this. Thus, from a purely economic perspective, the landlord in these cases are "leaving money on the table", i.e. they could capture more of my surplus income if rents happened to increase in a coordinated fashion. Unfortunately, there is nothing in Econ 101 which tells you why that would be bad or unsustainable (social unrest etc.) and thus these concepts will be hard to grasp for people who do not have to live this life.
And as mentioned homelessness isn’t the only option, I know plenty of people who have moved back in with family or still have room mates into their 30s and 40s.
Let me just take this spot to point out that from a landlord's perspective renting out two units at 100% is economically equivalent to renting out one unit at 200% while letting the other unit sits empty. However, it is strictly worse for society at large because of the artificial scarcity of a basic right.
Housing is not a natural right. Rights don't have limits (until they harm someone else), so something like speech can't be artificially scarce.
There is no hard reason why socially adequate housing cannot be considered a right.
Maybe there is also a right to a job at Google.
When did society get the responsibility to bail out the high-paid bankers who failed in 2008/9? Occupy wall street didn't think we should bail them out.
Soft vs hard means what? More like a slippery slope until too big to fail bankers are rescued by the working class collective.
Rights are endowed by our creator (higher power or whatever your words may be). Rights are not backed by a responsibility.
If your response is "they're not natural rights either", then maybe it's a matter of semantics, because I consider housing rights on the same level as clean drinking water.
(And I wish people would comment rather than just downvote, as a discussion requires comments.)
If it's a new purchase, sure.
And if you do buy when rates are high you can also refi when rates fall.
(Edit: This is in the US; adjustable mortgage rates are more common in other countries)
Is that even a thing? Looking at the data[1], there doesn't seem to be any correlation between recessions (areas shaded gray) and rents rising faster than normal.
[1] https://fred.stlouisfed.org/series/CUSR0000SEHA (you can use "edit graph -> units -> Change from Year Ago, Index 1982-1984=100" to make changes easier to see)
This recession comes with increased interest rates, and we've had a massive Buy to Let scheme for God knows how many years, where people bought houses on mortgage and rented them out. Rising interest rates = rising mortgages = landlords that have to increase rents to keep earning the same amount.
The point is that the average person gets squeezed from multiple sides, and the higher on the foodchain you are, the more chances you have to outsource your losses.
And what were the landlords doing before? Leaving money on the table by refusing to raise prices to what tenants were willing to pay? I find that unlikely.
Suppose the mortgage is 500, and rent 600. 100 profit for the landlord.
If tomorrow the mortgage increases by 200, the rent will have to increase by the same amount to maintain a profit margin of 100.
If you're asking why was the rent "only" 600 and not 800 in the first place, is that your price is affected by demand and supply. If your prices are ridiculous, nobody'll rent from you. But if everyone around is on a Buy to Let scheme and mortgages (thus rents) rise, your tenants will have to accept your rent increase because all supply has become more expensive. No one is leaving money on the table. It's markets 101.
Do you rent? If yes, how much does rent have to increase before you decide, "Ah yes, I would much rather be homeless, but at least I am voting with my wallet, that will show the greedy landlords not to raise rents!"
I personally cannot think of a limit at which I would decide to be homeless. I would much rather have a home to live in than buy any food beyond what sustains me, or get new clothes, or go out for any entertainment reasons. I believe I am not the only one in this. Thus, from a purely economic perspective, the landlord in these cases are "leaving money on the table", i.e. they could capture more of my surplus income if rents happened to increase in a coordinated fashion. Unfortunately, there is nothing in Econ 101 which tells you why that would be bad or unsustainable (social unrest etc.) and thus these concepts will be hard to grasp for people who do not have to live this life.
But it always works a bit like this: First the stocks come down, then the earnings and then the whole economy.
It will be interesting to watch what guidance the companies will give for the rest of the year.
Still, in the end, when things are "generally down", you're going to see the economy go down, the stock market go down, people's fortunes (large and small) go down... they may not be as connected as they "should" be, for some value of "should", but they are certainly neither anti-correlated, nor entirely uncorrelated.
Caveat, I am not anti capitalist. But I do think much of the dynamic driving the entire financial side of the economy is the mental process of a very few. That is, at tuis level its not impersonal forces.
They pick up the phone (or mail in this case) to the CEO of the companies they own and say: get the stock price back up by cutting 20 percent.
2000 - there was a major correction and the companies that were laying off were mostly in the nascent tech sector. If you worked as a software dev in a profitable “enterprise company” things kept humming along. I personally saw no decrease in demand in Atlanta for instance for software developers at banks, insurance companies etc.
The overall tech market was so small back then it didn’t affect the rest of the market.
2001 - After 9/11 - it didn’t really have any effect on the job market.
2008-2011 - there was a real slow down in spending that was partially offset by the then new mobile market and BigTech really started taking off.
2020 - Covid - of course in some industries people were spending a lot less.
2023 - even now we are just getting back to levels of employment for the profitable tech companies that they were pre-Covid. The overall job market is not seeing layoffs and unemployment is still low.
After careful study of money supply and interest rates, I think this more closely matches economic cycles: When "federal reserve" manipulates money supply by raising the price of money (interest rates) or reducing the amount of money (through lender reserve requirements and other tweaks) there will be layoffs.
In other words, don't fight The Fed.