Rent skyrocketed last year and most analysts predicted that the rising costs would eventually stop sooner. However, it turns out that the analysis and predictions were wrong. As of the latter 2015, rents are yet to slow down. In fact, rent is still getting higher and it looks like the increase will move on to 2016.
Rent growth as of September was 5.2% which is the highest figures since 4 years ago. That figure also marks the 8th streak in months that the number is at 5% and higher. During the previous year, the rent growth was only at 4.1%.
And although apartment constructions has been rising as well to meet the demands, some still asses that the supply is falling short.
Furthermore, a statement by Sam Chandan, Chandan Economics president say that, "New inventory coming to market is weighted to the high end - it's urban, Class A, with a rich set of amenities, targeting the coveted college-educated millennial," "Overall, we still have an affordability crisis in the United States with rents rising faster than incomes for the fourth-consecutive year."
Just this September, the vacancies in apartments were low at 93.5% occupancy nationwide. But the assessment is that, weak growth in income may no longer be able to support rent increase in some markets.
There are actually studies that suggest that buying a home is even more affordable than renting. It's just the downpayment that makes all the difficulty and difference.
As of recently, rent gains are highest in cities such as Seattle and Portland. Rent costs are also above normal in Nashville and Charlotte.
According to David Crow, chief economist for the National Association of Home Builders, younger households continue to rent an apartment as they move out of their parent's homes or roommate living arrangements, which drives up the demand for rental units.
Accodring to a CNBC report, "Thirty-five percent of new home starts in 2015 have been multi-unit," "That is higher than a year ago and the highest share since 1973. Developers are simply going to where demand is highest and most lucrative."
