Tags: apartment | rents | vacancy | economy | wage

WSJ: Apartment Rents Rise as Wage Growth Fuels Strong Demand

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Wednesday, 26 September 2018 12:29 PM

Apartment rental prices reportedly rose in the third quarter as a strong economy with better wage growth helped boost demand for apartments.

The Wall Street Journal reported that demand may also have been fueled by a weak home-sales market, as tight supply may have prompted more renters to put off buying.

Apartment rents rose 2.9% in the third quarter from a year earlier, up from 2.5% annual rent growth in the second quarter, according to real estate analytics firm RealPage Inc.

The strongest rental markets remained concentrated in the Sunbelt. Rents grew 6.6% in Las Vegas and 6.5% in Orlando, Fla., in the third quarter compared with a year ago.

In contrast, the worst markets in the country are places that were once some of the hottest markets in the country and where developers have flocked to build new supply. Those include Nashville, Tenn., at 1.8% annual rent growth and Seattle. New York and Portland, Ore., which all had 1.7% annual rent growth.

Meanwhile, the U.S. apartment vacancy rate inched up in the third quarter, Reuters explained.

The national apartment vacancy rate rose to 4.8 percent in the third quarter from 4.7 percent in the second quarter and 4.4 percent a year earlier, with 45 of 79 metros reporting a rise in vacancy, real-estate research firm Reis Inc. said in a report on Tuesday.

"The passing of the Tax Reform and Jobs Act in December that doubled the standard deduction and cut the deductibility of state and local taxes reduced the incentive to buy a home. This has helped the apartment market, especially in high-taxed localities," Reis said in a statement.

Occupancy is expected to remain positive, although vacancy rates are likely to increase, as new supply will outpace demand growth, according to the report.

Both the national average asking rent and average effective rent rose 1.2 percent, compared with the preceding quarter, the Reis report said.

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Apartment rental prices reportedly rose in the third quarter as a strong economy with better wage growth helped boost demand for apartments.
apartment, rents, vacancy, economy, wage
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2018-29-26
Wednesday, 26 September 2018 12:29 PM
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