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US rental slowdown predicted in 2016
Global SourcesUpdated on 2023/12/01
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Despite the expected slowdown, popular rental markets are seen to maintain their momentum, but increases will not be sharp.
Image courtesy of hywards at freedigitalphotos.net
Research from online real estate database firm Zillow predicts that the US rental rate, which grew 3.3 percent in December 2015, is expected to slow to 1.1 percent by the same period this year.
Apartment developers have moved to several large US markets and more units are purchased online. These push the vacancy rate in major cities up and tempers rent increases, according to the Census Bureau.
In some markets, rents would go down due to low demand and limited job growth in local economies, along with new supplies. The median rate in a large market such as Indianapolis is expected to fall by 3.6 percent within this year.
Despite the slowdown and as Zillow already mentioned in a previous housing forecast, many markets will continue to have unaffordable rents. This is especially evident in the West Coast. In Los Angeles, for example, median rents are projected to increase by 2.8 percent this year, and renters can expect to spend more than 40 percent of their income on rental payments.
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