Rents Keep Rising as Demand Soars
February 28, 2012
Rents nationwide continue to be on the rise, increasing 2.4 percent in January compared to a year earlier, according to new data released by the Labor Department. Demand for rentals remains strong. The apartment vacancy rate fell to 5.2 percent, marking its lowest level in more than a decade.
Rents have most been on the rise in tech-centered cities like San Francisco; Austin, Texas; and Boston. Rents also are rising in New York City; Washington, D.C.; Chicago; and Seattle.
Construction of new apartments has been slow to catch up to the increase in the demand. As such, the limited supply has caused prices to move up. In San Francisco alone, rents have risen nearly 5 percent in the last year, according to Reis Inc.
By the fourth quarter of 2011, about 2 million more households were renting compared to 2004, Kenneth Rosen, a professor of real estate at the Haas School of Business at University of California, Berkeley, told The New York Times.
A recent survey of more than 3,000 renters by Apartments.com found that 33.6 percent of those who were looking for an apartment this year say they are previous home owners (up from 20.5 percent in 2011).
“The fact that more renters are entering the market continues to create a series of challenges for the potential renter, including fewer apartments to choose from, which can drive higher rent rates,” says Chris Brown, vice president of product management, Apartments.com.
Source: “Rents Keep Rising, Even as Housing Prices Fall,” The New York Times (Feb. 25, 2012) and “More Previous Home Owners Are Looking to Rent in 2012,” RISMedia (Feb. 26, 2012)
Updated: November 16, 2018