US rental prices rising as demand for lettings remain strong, according to NAR survey

Demand for rental property in the United States remained strong in March, according to the latest index from the National Association of Realtors.

Some 48% of members involved in lettings reported higher residential rents compared to 12 months ago, an increase from 46% in the previous month.

NAR said that rising rents may make home ownership more attractive but also may slow the ability of current renters to save for a home purchase.

‘The March data indicates a more upbeat confidence concerning market conditions compared to February,’ said NAR chief economist Lawrence Yun.

‘The improvement may reflect the seasonal uptick in demand with the onset of spring. Confidence about the next six months also showed a slight improvement in March compared to February,’ he explained.

The major problems reported by real estate agents were low inventories of available homes and difficulty in obtaining mortgage financing.
An exceptionally large number of respondents across several states reported very low inventory levels relative to demand.
Another major problem is credit access and respondents said that even good credit clients were having trouble qualifying for mortgages.
There were also reports that the Qualifying Mortgage (QM) regulations and the increase in FHA mortgage insurance premiums have had an adverse effect on buyers.

Appraisal valuation is still an issue although the survey data indicates fewer transactions facing appraisal problems compared to previous months.

The cost of obtaining flood insurance and the sluggish job growth continued to be reported as negatively impacting the market.