Home sales are low and rent is starting to rise

Often there is debate on whether to rent or to buy, and the cost of renting is going up. More people are electing to rent apartments, and vacancies have plummeted countrywide among rental properties. That presents landlords with a fantastic chance to charge more to new tenants, as the demand means the resource is scarcer.

Get the apartment rented with no problems

The number of rental property vacancies has been steadily falling for more than a year, according to Bloomberg. The occupancy rate is very high. The vacancy rate throughout the nation is only at 6.2 percent total. There’s a business called Reis Inc., which tracks real estate data throughout the nation. This company observed that there was an 8 percent vacancy rate in April 2010 which dropped to 6.6 percent by the time the year was over. More than likely, there is one age group taking up all the rental space, according to Reuters. This contains anyone from age 20 to 34. The amount of individuals needing a place to live isn’t going down. Nevertheless, people do not want to purchase yet. It could be very hard to find a new apartment now with all the vacancies continuing on.

Rent is rising

As fewer apartments and other rental properties are accessible, the cost of those properties goes up. There is also a rise in countrywide rent averages. The Reis Inc. survey also stated this. The national average effective rent, which is what people pay each month, is $991 per month, a rise over $967 a year ago. There was also an increase in the asking rent. It went up from $1,027 to $1,047 from a year ago. The actual rent went up $20 while asking rent went up $20. At this time, there are also fewer duplexes and apartment complexes being built. That signifies a higher rent in the future is very possible.

Americans don’t have to buy for any reason

Buying real estate is something Americans do not have incentive to do. Rates of interest and values are very low. Nevertheless, getting financing is harder than ever. CNN reports the Federal Reserve said 25 percent of applicants aren’t given loans while borrowers with a credit rating below 760 can’t be backed by Freddie and Fannie. Most banks are hoping for a 20 percent down payment on homes as well. This isn’t a simple thing for Americans to do.

Citations

Bloomberg

bloomberg.com/news/2011-04-06/apartment-vacancies-in-u-s-fall-to-three-year-low-as-rental-demand-climbs.html

Reuters

reuters.com/article/2011/04/06/us-usa-apartments-idUSTRE7353CD20110406

CNN

money.cnn.com/2011/04/06/real_estate/why_you_cant_get_a_mortgage/index.htm