US Rental Market Sputtering

Posted by Staff writer on May 06, 2016 10:04 AM EDT
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Housing Report Suggests Rising Rents Could Lead To Home Market Turnaround more big
SAN FRANCISCO, CA - JUNE 15: A large 'rent' banner is posted on the side of an apartment building on June 15, 2012 in San Francisco, California. According to a report by Harvard University's Joint Center for Housing Studies, the tepid real estate market could see a turnaround with the price of rental properties surging and vacancies dropping from 10.6 percent in 2009 to 9.5 percent last year, the lowest level since 2002. (Photo : Justin Sullivan/Getty Images)

For the first quarter of 2016, the national vacancy rate had increased and alongside it the rent increase average has declined. In a report from the Wall Street Journal, the then red-hot apartment rental market had started to cool down. This was interpreted as a sign that the cost of housing that had become unaffordable to the average American is now sputtering.

As this becomes the reality, one of the hardest hit sectors would be housing for new graduates. According to a report from Forbes.com, these newly minted degree holders would be seeking residences near a metropolitan area, where jobs are available. A few would be able to live under their parents' roof, but for a great many, rent would be a major expense.

The research was conducted by Axiometrics and it found that the average rent for off campus school housing, which many new graduates would opt in their first months of finding a job, cost about $533 near the University of Florida campus. In nearby Florida State University, the cost of rent was at $536. In comparison, the average room rental for March in Miami was at $1,000. In Orlando, one room sets back an individual at $651 and in the Tampa- St. Petersburg area, the cost is at $657.

In another report, this time from the World Property Journal, found that housing markets in Florida, Louisiana, Arkansas and Tennessee accounted for the top ten rental markets in terms of rate increases for 2015. The news report quoted the findings of research firm RentRange, which also identified California, Washington and Hawaii as amongst the top markets in terms of rent increases for the Western region of the United States.

This was confirmed by RentRange Chief Executive Officer Walter Charnoff, who said, "The single-family rental market remains strong across the US, as the homeownership rate continues to decline and a higher percentage of the population migrates to rental housing."

 

 

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