Daily Real Estate News | Wednesday, November 26, 2014
Renters need to brace themselves: Apartment rent is expected to continue to outpace inflation next year. It’s a landlord’s market, which means strong demand continues to give landlords justification to hike rents.
A Soaring Sector Apartment Boom Riding Two-Decade High 4 Predictions for the Commercial Market 14 Priciest Neighborhoods for Renters Rising Rents, Falling Wages Leave More Cash-Strapped Rent growth will likely reach 3.9 percent in 2015, only a slight dip from 4 percent this year, according to a recent forecast released by the National Association of REALTORS®.
For at least two more years, vacancy rates for rental apartments are expected to remain low. “Low housing inventory and the sizable demand for rentals will continue to spur multifamily construction as well as keep rents rising above inflation through next year,” says Lawrence Yun, NAR’s chief economist. The Bureau of Labor Statistics shows that annual rental inflation is nearly double the price of overall inflation.
Builders are increasing the construction of multifamily units but are struggling to keep pace with demand.
The following metros saw the lowest vacancy rates for rental apartments in the fourth quarter, according to NAR:
Orange County, Calif.: 2.2%
Sacramento, Calif.: 2.2%
Providence, R.I.: 2.3%
New Haven, Conn.: 2.3%
Hartford, Conn.: 2.4%
Source: “Apartment Rent to Outpace Inflation Next Year: NAR,” MarketWatch (Nov. 24, 2014)