When the housing market crashed people were in pandemonium. The economy was tanking and everybody was flustered trying to switch from buying to renting. Well, it seems those times have passed as rents across the nation were 5.4% higher in June than they were one year ago, outpacing an increase in home asking prices.
Overall, 24 out of the 25 largest metropolitan markets saw rents increase in price. The only exception to that was Las Vegas which is a little surprising due to the fact that demand for apartments in Las Vegas was expected to increase due to rising employment opportunities.
In addition to that, the pace of increases also quickened from March to June in almost all rental markets. Rents in San Francisco were almost 15% higher in June than they were last year which is also more than the 11% increase seen in March. Other markets that saw increases of double digits include Oakland, Denver and Boston.
Asking prices for home sales also saw an increase in June by 0.3% over last year and also increased in 44 out of the top 100 markets. Asking prices for homes typically lead home sale prices as well. Las Vegas has a strong apartment rental market, which may be one factor that is keeping its rents lower than some other metropolitan areas.
These comparative changes suggest buying is becoming a better deal than renting in some areas, assuming that buyers are able to save for a down payment and can get financing. However, the gains in home asking prices in some areas may not be permanent.
Miami saw a 16% increase year over year but also saw a large number of foreclosures as well, something that weighs on any price gain. Low prices can attract investors but job growth in the market has to be strong in order to sustain the increase.
Las Vegas still seems like a good place to rent if you are in the market. Rents aren’t rising nearly as fast as they are in other areas but these lower prices won’t be there for long. If the job growth really does kick up in the city then you can expect rental rates to kick up as well.
Source: The New York Times – Rent Increases Suggest Buying Is Becoming a Better Deal