Apartment Rents Rising as Vacancies Drop

ABC News and real estate research firm Reis report that across the country in many markets, the apartment rental business is very strong and that landlords have pricing power. Real estate experts have raised concerns about so called "Generation Renter" and this report speaks to that reality. A dilution of the first -time buyer pool is not bullish for housing prices, except if you're a landlord.

“Demand for apartments remains strong,” says the report. “There are a number of markets where rents continue to boom such as Seattle, San Francisco, San Jose and Oakland-East Bay.” The building slump during the housing crisis meant little new supply and put landlords in a stronger position, allowing them to charge more. As the construction industry recovers, Reis expects vacancies to increase slightly in 2014 while rents rise by about 3.3 percent, on par with last year. Full story here.

In addition, the Atlantic reports that a growing affordability gap, even with historically low interest rates, represents a troubling trend. "The result is that according to the latest data, about half the 40.6 million American households that rent their home are what economists consider "rent burdened," meaning they spend at least 30 percent of their income on housing. More than a quarter are "severely rent burdened," meaning they spend at least 5o percent of their income on housing." Get the full article HERE.

At BuyerMLS, we're watching these trends and developments very carefully, especially as it pertains to the buyer market for housing.