According to the United States Census Bureau, 36% of the nation’s 122.8 million households are renters. According to the report, young people, racial and ethnic minorities, and households with lower incomes are among the most likely to rent. As a result, the number of evictions among these demographics is likely to be disproportionately high.
A recent Redfin report has found that rents are rising as fast as home prices. However, the report doesn’t account for all rent increases, and it may be biased toward higher-end tenants. It may also miss listings from mom-and-pop landlords.
In December alone, the rents for studio, one-bedroom, and two-bedroom units grew by over 10% year over year. Only studios, which had experienced the slowest monthly growth, continued to grow.
The price of rent is highly variable by state. Renters in California need to earn more than twice the national average hourly wage to afford their monthly rents. In North Carolina and Arkansas, rents are triple that. But despite the rising cost of renting a home, most people who rent their home pay more than the minimum wage.
In recent years, the cost of renting an apartment has increased dramatically. A two-bedroom apartment in Austin, Texas, costing $1,000 a month in 2014 is now worth almost $2,400. Seamon said it’s impossible to find the lowest-cost apartment in the city right now. The cost of renting a home is one of the leading causes of inflation.
In some metro areas, rents have risen 30% in recent years. Among the companies involved in the rise in rents are Greystar, FPI Management, and Mid-America Apartment Communities. These companies control thousands of apartments across metro areas.
Demand for housing and apartment rentals
As a result, the demand for housing and apartment rentals in the USA has fallen slightly, according to the latest RealPage data. The demand for housing and apartment rentals in the third quarter dropped by 0.8 percentage points nationally. In addition, incomes of renters rose by 13% year over year through August, and the rent-to-income ratio remained above 23 percent. Despite the drop in demand, apartment rentals are still collecting more money than ever. In August, 95.4% of renters were market-rate renters.
The rising rents are due in part to more restrictive zoning laws, which make it difficult to build smaller houses and apartments. However, millennials who are just starting out in their adult lives are finding it increasingly difficult to afford their own apartment or house. Moreover, they are increasingly living with roommates or in their parents’ basements. According to Redfin’s survey, rents are expected to rise between 3% and 14% in 2020.
The vacancy rate for rental housing is an important factor for determining the demand for apartment rentals. The vacancy rate in a rental market is measured as the percent of available units. Generally, a tight rental market is characterized by lower vacancy rates. Due to this, rents will rise because renters will compete for a limited supply of apartments.
In the third quarter of this year, the dollar volume of multifamily transactions grew by 9%. This indicates that the demand for housing and apartment rentals is still strong. The first three quarters of 2019 have seen strong growth in net operating incomes for multifamily properties. Harvard University publishes an annual report on the rental market, which includes many stats about the market. However, the report does not cover Covid era data.
Vacancy trends
Vacancy trends for housing and apartment rent across the USA are showing a significant reduction. Rental vacancies are down in both rural and urban regions. The national rental vacancy rate is down by 17.1%, and the vacancy rate for owner-occupied housing is down by 42.8% in 2020. While both rates remain steady over the next five years, most metropolitan areas are experiencing a drop in vacancy rates. This decrease is largely due to a combination of a decline in population and a rise in homeownership.
Vacancy trends vary by city, and there are differences among metros and states. For example, the national average rental vacancy rate was 7.3% during the third quarter of 2015. In contrast, apartment market conditions varied from soft to very tight across the 10 regions of the HUD. In some regions, rents are increasing at a rapid pace, triggering a housing crisis. While the causes for this increase are often local, the data can be useful for researchers to identify which cities have high vacancy rates and which neighborhoods may experience rent increases.
Vacancy trends for housing and apartment rent are important economic indicators for landlords and property owners. In a high-vacancy area, landlords can bid up the rents to lure more tenants. High vacancy rates, on the other hand, can result in an increased number of homeless people.
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