Asking rents rose in 24 of the 25 largest rental markets from a year ago, according to a new report from online real estate company Trulia. Rents are pushing double digit gains in San Francisco, Miami, Oakland, Denver, Seattle and Boston, and rents are rising faster than asking prices in 21 of the 25 largest rental markets year-over-year.
“For the first time, [home] prices are up year over year in a majority of metros, and asking home prices have increased for six straight months," writes Trulia's chief economist Jed Kolko in a release. "Rents, however, are rising even faster than prices in most markets. These price and rent increases, along with declining vacancies, should encourage new construction, which means housing will finally start contributing to the economic recovery.”
The question remains, where is the tipping point? As it becomes more expensive to rent than buy in more markets, more Americans should turn to buying, but so far they are not. Issues with negative equity, credit and confidence continue to plague home buying.
And are rents approaching bubble status? Investors continue to flock to the distressed housing market, trying to take advantage of rising rents, specifically in single family. Many of those investors say they are not concerned about a bubble, believing there has been a sea change in attitudes toward home ownership that could last through the decade. Whether it is attitudes or lack of available credit keeping the rental market on a tear, at some point, as happened during the housing bubble, prices will prevail.
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