The dearth of residential construction in the past four years and a growing (albeit sputtering) economy, has set the stage for several years of rising rents—and in some locations SIGNIFICANTLY rising rents. One of the mega themes I have addressed this past year in my presentations has been the trend towards more people becoming renters rather than owners.
24/7 Wall Street completed a study examining rental growth rate, home price changes from the peak and in the prior 12 months, and job growth in the price 12 months.
Data taken from Trulia found that in the 100 largest housing markets home prices increased slightly (yes—once again showing that the housing market bottomed last year) and rents increased more than 5 percent on average. Six markets showed rents rising more than double digits. These markets are detailed in the following table.
The bottom line is that rents will continue to rise (as will home prices), which should make many renters consider becoming homeowners.
Owners of rental housing will see rising rental rates and values, once again.