Rents are forecasted to rise nationally 4.6 percent next year, and that’s following a 4.1 percent increase this year, according to the National Association of REALTORS®.
What’s more, rents are expected to continue to climb for the foreseeable future, rising more than 4 percent a year for 2014 and 2015, forecasts Reis, a market research firm.
“The pendulum has definitely swung back in favor of landlords, not renters,” Ryan Severino, senior economist for Reis, told USA Today.
Rents are rising even more rapidly in some areas. For example, rents in San Jose, Calif., and San Francisco have been climbing at a 13 percent to 15 percent annual rate as of late last year, according to MPF Research. Other metro area seeing rent increases of more than 5 percent by the end of September include Oakland, Calif.; New York; Denver; Houston; Nashville; and Columbus, Ohio, MPF reports.
The rise in rental costs are causing more renters to consider home ownerships, says Greg Willett, MPF vice president. Mortgage rates are at historical lows and home prices are up, but still way below their 2006 peak.