Rent growth at a 10 month high in the United States in February, latest index shows
Residential rents in the United States increased by 2.4% in the 12 months to February 2019 to a median value of $1,472 per month, the latest real estate index shows.
This translates to more than $400 in additional yearly expenses for the typical renter, according to the data from real estate firm Zillow.
The index report points out that rents have steadily recovered since a slowdown in the autumn that saw the first annual price decreases in more than six years and now on an annual basis they have increase at the highest level since last April.
The data also shows that annual rent growth accelerated from January rates in most large housing markets, with the biggest jumps coming in Portland and Indianapolis.
The only two large housing markets where rent growth fell were Orlando and Pittsburgh. Despite that slowdown, both still saw higher than average growth, with Orlando rents growing faster than any other large metro area at 7%.
The report also points out that in New York renters have yet to see an effect from Amazon’s decision to not build a new headquarters in Long Island City. Its rent prices, along with those in Washington D.C., and Nashville, two markets where Amazon still intends to build large office spaces, have largely followed national trends since the November announcement.
‘The rental market spent part of last year catching its breath after several years of breakneck growth,’ said Zillow economist Jeff Tucker.
‘Landlords are now coming to terms with the fact that rent cannot grow faster than income forever, and after that short correction we can expect a much more vanilla, slow growth market going forward. As we enter the 2020s, the demand for rentals is projected to fall as many millennials move on to home ownership,’ he added.
While rent price growth increased, national home value appreciation sagged to its lowest level since December 2017, up 7.2% year on year to a median value of $226,300. The cooldown was felt most in San Jose and San Francisco, although these remain the two priciest large markets in the country.
Inventory increased by 1% year on year, the fifth month out of the past six in which inventory has increased on an annual basis, after declining for 44 straight months. Inventory picked up the most in San Jose, Seattle and Los Angeles, further signalling a cooldown from the frenetic pace of the past year in major West Coast markets.