With more households fed up with the rising cost of rent and with homeownership often more affordable on a month-to-month basis, rents hit a wall in the fourth quarter last year.
Rents simply stopped growing. What changed in the past quarter? Statistics confirm a more robust for-sale housing market is now emerging, recovering from its long hiatus. Where there was once a bloated inventory of houses for sale with many homeowners losing homes to foreclosures or opting for a short sale to avoid foreclosure, new listings are now fewer and far between. Combined with the short supply are record-low interest rates currently hovering at around 3 percent to 3.5 percent. What’s more, metropolitan areas that experienced the highest rent growth are now becoming centers of housing recovery.
We may see increased occupancy in the near future as rents are priced at sustainable levels, or we may see vacancy on the rise, if a glut of new construction hits a market all at once.