The demand for rental housing spiked this summer, climbing to a five-year high, according to real estate technology and analytics firm RealPage, Inc. While summer is primary leasing season, demand this year is up 11 percent over the same period last year.
RealPage chief economist Greg Willett attributes the climb to solid economic growth coupled with fewer renters purchasing homes.
Dallas-Fort Worth saw the strongest demand, followed by Chicago, Houston, New York and Washington, D.C.
Despite new inventory, demand for rental housing pushed the occupancy rate to 95.8 percent.
Rents also rose second quarter by 3 percent over last year, with the average monthly rent at $1,390.
Rent growth in Las Vegas and Phoenix exceeded 8 percent. Atlanta, Sacramento, Austin, Raleigh-Durham, Riverside-San Bernardino, Providence, Greensboro-Winston-Salem, Salt Lake City, Charlotte, and Memphis saw significant increases, between 4 and 5 percent.
Conversely, Houston saw sluggish rent growth of only 0.1 percent over last year, and rent cuts occurred in Des Moines, Iowa; Fargo, N.D.; College Station, Texas; Baton Rouge, La.; and Santa Rosa, Calif.
Construction remains at a thirty-year high. Over 418,000 units under construction are slated for completion in the next 18 months. Dallas-Fort Worth leads in new builds, followed by Washington, D.C.
Willett warns that this increased production creates some risk. “Most economists are anticipating a slowdown in economic growth, cooling support for housing demand. It would be tough to maintain price growth with so many new properties moving through initial lease-up at a time when demand has weakened,” he says.
RealPage is a leading global provider of software and data analytics to the real estate industry. Clients use its platform to improve operating performance and increase capital returns. Founded in 1998 and headquartered in Richardson, Texas, RealPage serves more than 12,100 clients worldwide from offices in North America, Europe and Asia. For more information about the company, visit http://www.realpage.com.
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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.