renting becoming new reality for former us homeowners
News Posted On: 12 January 2012
Homes may be much more affordable in many US states and mortgage rates at record lows, but many former homeowners and would-be first-time buyers are still choosing rental accommodation. Some are too scared to commit to buying a house in the current climate while others cannot get the financing.
The last quarter of 2011 saw apartment vacancy rates fall to 5.2% which is their lowest level since 2001. The figure is all the more remarkable for the fourth quarter when vacancies generally track up, because most people choose to rent new properties in the second and third quarters when the weather warms.
However the increase in occupancy rates only pushed up asking rents by 0.4% due to continued slow economic growth and high unemployment. Properties in more desirable areas were able to post rental gains of between five and 10% while those properties catering to lower income tenants were less able to raise rents.
One region in which this is particularly noticeable is the Washington Metro area where rents have increased considerably causing developers to build new multi-family buildings and refurbish older homes.
Property prices are also being driven up by the presence of REITs, all of whom are anxious for a piece of the pie. All this new rental stock is predicted to hit the market around 2014 indicating that investors don’t see home ownership coming back into favour anytime soon.
Property prices in Washington were not particularly hard hit by the housing crash and are already increasing. Detroit and Washington were the only major markets posting annual gains in the latest Standard & Poor/Case Shiller home price index.
View US property for sale
Written by Les Calvert+
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