Rental Rates Continue to Rise Nationwide, NYC Rental Rates Up 3.7%
Research has shown that becoming an apartment renter in the United States has become more pricey throughout the second quarter of this 2012. The amount of vacancies has reached to record lows seen 10 years ago while the rent prices rose to rates that were last seen before the recession.
The median vacancy rate in the United States reached a low of 4.7%, which is the lowest percentage seen since 2001. The average asking price for rentals in the United States increased to $1041 which is the largest rise we’ve seen the the third quarter of 2007. This percentage has increased 1% since the start of this year. The median effective rent increased by 1.3% which is the equivalent of $1,041. This price does not include the extra benefits companies offer to gain tenants such as free rent and other giveaways
Rent costs have also increased in areas in which some economists don’t believe is worth the boost. The effective rent costs increased 0.7% in Tennessee and Rhode Island which is the lowest increase discovered in those analyzed. Every area analyzed showed some form of increase and compared to the last 12 months, effective rent rates have increased 2.2% in the United States.
Apartment renters have been forced to deal with higher rates since the end of 2009 but rental costs have grown at alarming rates over the last 9 months.
This upsurge in rental costs can be attributed to the rise in demand from individuals who need a place to live but cannot get funding approval, can’t afford home ownership, or simply cannot find a home due to lack of inventory.
The decrease in new construction has also influenced the rise in resident who live in overpopulated cities at higher rates. This has also been the catalyst of increased rental rates in highly populated cities such as San Francisco and New York. These factors all play a part in the success of the apartment market in the United States which has been the most effective form of commercial real estate throughout the recession.
The highly populated and costly New York City apartment market showed a small increase in vacancies. (Less than 1%) New York City holds the title for the lowest vacancy rate in the United States with a 2.2% which is surprising since New York City is one of the most expensive locations to rent an apartment.
The effective rent rate rose 1.7% in New York from the last 3 months and 3.9% in the last 12 months. The median monthly rent for apartments in New York was $2,935 which $1,000 more than the second ranked city. Other cities that showed notable increases in effective rent rates were Denver, Boston, and Seattle.
As rental costs rise nationwide, how does this affect the housing market in the United States? Rental rates are projected to continue to rise which makes home ownership more promising to some renters.