Rents on the rise as house prices start to increase
While reports on home prices have been mostly uninspiring, rent prices continue to make significant strides, with rent increasing more than 10 percent compared to a year ago in certain markets, according to findings from Trulia.
Rent prices rose 5.6 percent in April compared to a year ago during the same month, Trulia reported. Rent prices showed even greater increases in places experiencing rapid employment such as suburban Detroit (Warren-Troy-Farmington Hills, MI) and Silicon Valley (San Jose, CA).
“Rents have steadily increased as people who lost their homes in the crash became renters. At the same time, high unemployment and tight credit sidelined would-be homeowners,” said Jed Kolko, Trulia’s chief economist. “But relief for strapped renters may be in sight. Construction of multi-family buildings revved up last year. These new rental units will come to market later this year, giving renters more choices and less fierce competition.”
Good news was also in store for asking prices, which compared to the previous month of March, increased 0.5 percent in April on a seasonally adjusted basis, according to Trulia, which also noted that asking prices lead sales prices by approximately two or more months.
On a quarter-over-quarter basis, prices in April rose 1.9 percent. When not adjusted for seasons, prices saw an even greater increase at 4.8 percent since prices typically jump in the springtime.
Year-over-year, asking prices rose 0.2 percent.
“Prices have joined the recovery, alongside sales and construction. But foreclosures threaten prices, especially in judicial-foreclosure states like Florida, New Jersey, Illinois and New York, where many more distressed sales are still to come,” said said Jed Kolko, Trulia’s Chief Economist.