Rental rates for apartments in the U.S. went up in the second quarter of 2014 as demand for multi-family leasing units rose, surpassing the current supply in the market.
According to a latest report released by Reis Inc., a New York-based real estate research firm, average asking rents in the second quarter rose to $1,099, up 0.8 percent from the first quarter of 2014. The figures are up 3.4 percent on a year-over-year basis and this is the 18th consecutive monthly rise in apartment rents.
The report also stated that rents were up in all the tracked 79 U.S. metropolitan areas and the growth was highest among the West Coast cities.
The research note also revealed that vacancy rates for apartments were unchanged in the second quarter of 2014 at 4.1 percent. However, some places like Las Vegas, Tucson and Lexington saw vacancy rates declining with about 45 of the metro areas witnessing a fall.
Below are the top five cities where rents are rising the fastest:
1. San Francisco - 6.7 percent
2. San Jose, Calif. - 6.2 percent
3. Seattle - 6.2 percent
4. Charleston, S.C. - 5.9 percent
5. Oakland, Calif. - 4.6 percent
The researchers added that demand for apartments among Americans has outpaced the supply. However, they are optimistic about more units opening their doors in the coming months, which should ease the pent-up demand. Experts predict that an average of 18,000 units will be completed by the end of next quarter.
"You have definitely seen that recovery now spread to all of the major markets around the country, even if some of them were laggards. It's a very pervasive recovery," Ryan Severino, an economist at Reis, told The Wall Street Journal speaking of the growth in the U.S. apartment market.
Indeed, U.S. home sales haven't been very impressive as the housing market was hampered by the harsh winter in the first few months of the first quarter. However, existing home sales picked up in May. Mortgage rates also ticked up for two weeks before dropping this week.
Earlier in June, a CNN Money poll found that more Americans are opting to rent than to buy because they don't have much faith in the market. Considering the economic conditions (GDP, unemployment and job growth), buyers are cautious about investing in real estate and are observing the trends before taking the property plunge.