The Impact of Roommate Departures on Skyrocketing Rent Costs and Small Businesses in NYC.
The reason why rents are still high despite the pandemic exodus is that people got sick of living with each other and decided to move out of their cramped quarters for places of their own, creating thousands of home hunters, all jostling for a relatively fixed number of units. This surge in household formation caused an increase in the "extensive margin of demand" and the "intensive margin," leading to an increase in the number of people wanting not only places of their own but also bigger homes. The rental market is now in the middle of another shift as higher interest rates squeeze consumers at every turn.