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http://www.marketwatch.com/story/hot-rent-growth-isnt-letting-up-2015-05-22?siteid=YAHOOB
?uuid=fc3c5c16-0086-11e5-98e1-365404726f55
Landlords kept financial pressure on tenants last month, as annual rent growth far outpaced households’ other costs, according to data released Friday.
The cost to rent a primary residence rose 3.5% over the year through April, while the overall consumer-price index dropped 0.2%, dragged down by plunging energy costs, the U.S. Labor Department reported.
With homeownership at the lowest rate in 25 years, and the rental-vacancy rate close to the slimmest proportion in more than two decades, 2015 is seeing a continuation of a landlord’s market, and letting landlords to charge more.
Just how hot is rent inflation? Annual growth in tenants’ payments has been between 3.4% and 3.5% for the past six months, higher than an average of about 3% for the past two decades. Builders have ramped up apartment construction, a trend that should ease price pressure, but it will take time for that new supply to become available. As long as demand remains high for apartments, landlords will be able to continue to raise families’ housing costs.
High rent prices may be affecting other areas of the economy, keeping households from spending their savings from tumbling gasoline prices. Economists had expected a stronger labor market and cheaper gas to lead to more shopping, but that effect hasn’t panned out. While energy prices have crept up in recent months, consumer costs for gasoline in April were down more than 30% from a year earlier, the Labor Department reported.
Other data confirm that rents are rising quickly. Real estate site Zillow recently reported that rents in April rose at their fastest pace since 2013, rising 4% year-over-year. Meanwhile, for America’s lowest-paid workers, renting a livable apartment might seem out of reach. The National Low Income Housing Coalition, a Washington-based advocacy group, said this week that in San Francisco, for example, a household would need 3.2 full-time minimum-wage workers to afford a “decent” two bedroom place at fair market rent.
?uuid=fc3c5c16-0086-11e5-98e1-365404726f55
Landlords kept financial pressure on tenants last month, as annual rent growth far outpaced households’ other costs, according to data released Friday.
The cost to rent a primary residence rose 3.5% over the year through April, while the overall consumer-price index dropped 0.2%, dragged down by plunging energy costs, the U.S. Labor Department reported.
With homeownership at the lowest rate in 25 years, and the rental-vacancy rate close to the slimmest proportion in more than two decades, 2015 is seeing a continuation of a landlord’s market, and letting landlords to charge more.
Just how hot is rent inflation? Annual growth in tenants’ payments has been between 3.4% and 3.5% for the past six months, higher than an average of about 3% for the past two decades. Builders have ramped up apartment construction, a trend that should ease price pressure, but it will take time for that new supply to become available. As long as demand remains high for apartments, landlords will be able to continue to raise families’ housing costs.
High rent prices may be affecting other areas of the economy, keeping households from spending their savings from tumbling gasoline prices. Economists had expected a stronger labor market and cheaper gas to lead to more shopping, but that effect hasn’t panned out. While energy prices have crept up in recent months, consumer costs for gasoline in April were down more than 30% from a year earlier, the Labor Department reported.
Other data confirm that rents are rising quickly. Real estate site Zillow recently reported that rents in April rose at their fastest pace since 2013, rising 4% year-over-year. Meanwhile, for America’s lowest-paid workers, renting a livable apartment might seem out of reach. The National Low Income Housing Coalition, a Washington-based advocacy group, said this week that in San Francisco, for example, a household would need 3.2 full-time minimum-wage workers to afford a “decent” two bedroom place at fair market rent.
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