Rents across the country are climbing steadily on upwards, as new data from the Labor Department reveals a 2.4% increase in January from the same month one year ago.
The data shows that demand for rental homes is also on the up, while the rate of apartment vacancies has fallen to its lowest level in ten years, at just 5.2%, according to a report in RIS Media. Urban centers with hi-tech industries such as Austin, Boston and San Francisco have shown the biggest increase in rents, followed closely by Chicago, New York City, Seattle and Washington DC.
One of the factors behind the increasing rents is that new apartment construction has failed to keep pace with the level of demand. Limited supply has been a big boon for landlords, who have been able to raise rents by up to 5% in San Francisco.
Further evidence of the increase in demand for rental homes was provided by the New York Times, which reported that by the end of 2011’s fourth quarter, approximately two million more households were renting than there were back in 2004.
RIS Media reported that a big number of these new renters were former homeowners. According to a poll of 3,000 rental property occupants, conducted by Apartments.com, just over a third of these used to own homes. This figure is up from the 20.5% recorded in a similar survey in 2011.
Chris Brown of Apartments.com told RIS Media that anyone looking to rent these days can expect to experience considerable difficulty in their search for a home.
“The fact that more renters are entering the market continues to create a series of challenges for the potential renter, including fewer apartments to choose from, which can drive higher rent rates,” said Brown.