U.S. apartment rent prices continued to rise in the first quarter, but new signs of a coming wave of construction will further restrict landlords' ability to raise rates, real-estate research firm Reis Inc. said on Wednesday.
The report said the nation's average monthly rent was up 0.5 percent at $1,054 from the previous quarter and up 3.4 percent from the year-earlier period. However it was the slowest growth rate since the end of 2011. Meanwhile, the national apartment vacancy rate fell 0.2 percentage points to 4.3 percent in the first quarter, the lowest since the fourth quarter 2001.
Overall, Rent prices have gained more than 9 percent since bottoming in late 2009.
"At some point, you can't keep pushing these rent increases on since the majority of the tenants, if they're not getting income gains to keep up with that, it's just not sustainable," Reis economist Ryan Severino said.
More than 100,000 new apartment units are scheduled to open this year, most in the latter half, Reis said. Shares of multifamily real estate investment trusts including Equity Residential and AvalonBay Communities Inc have fallen from a high reached in mid-2012 amid concerns that the housing recovery would hurt apartment demand and a deluge of new supply would restrict landlords' ability to boost rents.
The report noted that Seattle saw the highest effective rent increase, up 1.5 percent to $1,078 per month. New York remained the most expensive place to rent in the United States with an average effective rent of $2,989, up 0.2 percent.
