A slowdown in residential rent in the United States is expected until the latter part of the year by 1.1 percent annual rate according to reports from Property Wire.
At the end of 2016, an average rent of $1,396 is projected compared to last year's $1,381. The figure is based on the latest forecast from Zillow. Meanwhile, Douglas Elliman's latest rental market report has revealed a 2.89 percent increase in vacancy rates, the highest in nine years, as per The Real Deal. New leases are also down in January by 19.8 percent compared to the same period in 2014, while landlords' concessions reached as high as 16.4 percent.
Aside from that, there will also be a decrease in rental appreciation rate in the middle of the crisis renters are facing. In San Francisco for example, a 12.5 percent rise in rent was seen in the previous year and Zillow forecasted that the growth for this year will 5.9 percent. This slowdown is a sign of relief for renters, especially to those who have been paying high rental fees in the last few years.
According to Dr. Svenja Gudell, chief economist of Zillow, the slowdown indicates that the supply is catching up with the demand. New multi-family houses have been built up in states like Portland, Seattle, Denver and Atlanta.
On the other hand, The Real Deal reported that the reason for the rental market slowdown is the lack of new deals and the huge number of landlord concessions. President of Miller Samuel, Jonathan Miller, added that the new products making its way to the market could also be attributed for the slowdown.
Despite the bad news for landlords, some of the major markets in the U.S. will still have unaffordable rental fees specifically in the West Coast. In the same report, it was stated that in Los Angeles and San Francisco, renters are expected to pay almost half of their income on rental fees.
