Renters may see some relief in their pocketbooks, as hikes in rental costs slowed in the first quarter of this year, according to RealPage, a real estate technology and analytics firm. The average rent for new leases increased 2.3 percent to $1,310, marking a decrease from a 2.6 percent hike in the fourth quarter of 2017. Further, it’s the smallest yearly gain since the third quarter of 2010.
Since reaching a peak in 2015, at 5.3 percent, rental costs have been gradually easing. RealPage figures reflect new leases for residents who moved into an apartment over the past year. Rental costs for existing residents have been moderating, but not as much—increasing 4.2 percent annually in the first quarter, down from 4.4 percent in the fourth quarter.
“What we’re seeing is a return to more normal conditions,” says Greg Willett, RealPage’s chief economist.
An uptick in new apartment construction increased supplies in many markets, which has been helping to bring costs down. About 319,000 units have been completed over the past year, which is well above the historical pace of 250,000, Willett told USA Today.
Over the past few years, rental increases have outpaced wage growth, averaging 2 percent to 2.5 percent, RealPage reports. But incomes are increasing—and rising incomes mixed with a slower growth in rent could ease some financial tension for renters in the coming months. “Household income is going up faster than rent,” Willett says. “That’s a more comfortable situation.”
Source: “Rent Is Rising More Slowly, Easing Strain on Americans,” USA Today (March 29, 2018)
