Rents in the United States have been increasing steadily with April's figures marking the fastest growth rate since the economic recession, according to a new 2014 market trends study by Axiometrics Inc.
The report reveals that rents went up 3.4 percent in April across the country on a year-over-year basis and rose 0.3 percent on a month-on-month basis. In fact, the rental price increase was at the highest since 2009 in January, this year.
Experts at Axiometrics note that the increasing occupancy and job growth in major cities have fueled the rise in rents.
The rate of rental growth in Odessa, Texas, was the highest at 11.6 percent. The pace of growth however slowed down. The city has topped the U.S. rental price charts for four consecutive months now. Naples, Fla., came in second with rents rising at a rate of 10.2 percent. Oakland, Calif. and San Jose, Calif., were fourth and sixth, respectively, with a rental growth rate of 9.3 percent and 9.2 percent correspondingly.
"These outstanding April numbers exceeded expectations," Jay Denton, Axiometrics Vice President of Research said in an official statement.
"Whether performance continues to exceed expectations for the rest of the year, will depend on numerous factors," he added.
A large number of Americans started renting out homes after the recession bogged down the economy. The market crash was also a huge contributor to the shift from owning to renting. The Axiometrics report comes just days after the Census Bureau revealed that home-building permits for multi-family residences went up 19.5 percent in April on a month-on-month basis.
"The current stock of apartments is insufficient to satisfy demand, sending rents soaring across the country and making multi-family units an attractive investment for developers and landlords," said Stephanie Karol, an economist at IHS Global Insight, to Reuters.
However, a separate report by Zillow claims that buying is a better option for Americans who want to continue living in a property for at least two years, especially with the accelerating pace of rising rents. Now that mortgage rates remain at record lows boosting affordability, experts say this is the right time to buy.
"Rents keep rising, and mortgage interest rates remain very low, which is helping to skew the rent vs. buy decision toward buying for those who can afford it. Many renters may ask themselves why renew a lease, when you can break even on the same home in less time in many areas," said Stan Humphries, chief economist at Zillow, to Property Wire.
"However, some renters still have to overcome significant hurdles before they can pull the trigger on homeownership. For those renters who can't qualify for a mortgage or aren't able to save enough for a down payment on a house, renting can be a more flexible, and often far less frustrating option," he added.
