Real estate data firm Reis, Inc. is reporting that average rent costs have reached a record increase in 74 out of 82 markets that it is tracking in the second quarter, including cities like Chicago, Miami, Seattle, San Diego and Baltimore, and that rent has topped over $1,000 a month on average in 27 of those cities.
Likewise, Trulia is also reporting similar numbers in their findings, stating that rent increases have occurred in 22 of the 25 largest rental markets, and that rents were on average, “5.4 percent higher in June than they were a year ago.” The price to rent has accelerated in a short time span between March and June of this year, according to Trulia’s numbers. Hardest hit were cities like San Francisco, whose average asking rent rose to 10.9 percent over last March, but is currently seeing a 14.7 percent increase over last June’s numbers.
Despite the spike in rental costs, these numbers seem to indicate a growing trend to rent, as Reis is also reporting that the nation’s vacancy rate fell during the second quarter to 4.7 percent.
And in true supply-demand fashion, Reis is reporting in a Wall Street Journal article that these events go hand-in-hand. As the supply of apartments continue to tighten, landlords are subsequently left to accelerate the price increase on their units.
The preference to rent could be attributed to several economic factors like the current unstable job market. Adding to those factors could be Trulia’s other findings which state that asking prices for for-sale homes have increased 0.8 percent quarter-over-quarter in June.
Jed Kolko, Trulia’s chief economist, explained that they’ve noticed the asking price begin to increase in February, and that the trend may continue.
“Since February, asking prices showed solid gains in four out of five months, including June, so I expect to see the sales-price indexes show further increases in the months to come,” said Kolko.