Rents Rise as Single Family Home Prices Slip
RealtorMag.com, the online news site provided by the National board of Realtors, published a post detailing the increasing cost of renting a home in the United States. Landlords have been taking advantage of the hot rental market, causing rents to continue to rise another 3.6% in the second quarter of 2015 compared to a year earlier, the report read. “Rent growth has bloomed at a fast pace since 2012, hovering around a 4 percent annual growth since then.” This news contrasts with recent data from the Austin Board of Realtors that revealed the average listing price for single family homes slipped over $14,000 from May to June.
A continued inadequate supply of rentals is the main cause of the increasing cost to rent. Ryan Severino, senior economist at REIS - the nation's most trusted source for property and market intelligence - says that inadequate supplies are pushing up rental costs. "We're waiting for the supply to come on the market but it just hasn’t hit yet," Severino says.
REIS projects that 230,000 units will be completed nationally this year -- that's nearly double above normal levels. For the Austin rental market, that may not come soon enough as record numbers of people relocate to the city and college attendees and graduates continue to flood the market.
In the second quarter, the apartment vacancy rate was just 4.2 percent. Stephanie McCleskey, vice president of research for Axiometrics, says that as new supplies hit the market, "we'll probably see rent growth begin to decelerate.”