Because of the challenges in the current economy, many families have either decided to rent or been forced to rent. How has this impacted rental options and the cost of the available options?
HousingWire recently quoted Paul Dales, senior economist with Capital Economics:
“As a consequence of Americans being less willing and less able to buy a home, the number of households in rented accommodation is set to rise by at least 850,000 a year over the next few years.”
The price of anything is determined by supply and demand. As demand increases, the price of an item will increase unless there is an equal increase in supply. The article mentioned above said:
“Dales said in his research that rental vacancy rates will fall again in the future, pushing prices up. The median rent is already up to $712 per month—well above the average monthly mortgage cost of $647, Dales reported.
He estimates vacancies in the home-rental market will push average rental rates up as much as 5% by early 2013.”
How many markets will be impacted? A new rent index offered by Zillow:
“…showed year-over-year gains for 69.2 percent of metropolitan areas covered.”
Rents are increasing and will continue to do so for the foreseeable future. In many parts of the country, buying a home might make more sense as you can lock in your housing expense for the next thirty years.