Rental Income Rises 12% Over the Year in September

After growing just 1.3 percent in the second quarter of this year, the economy grew 2.7 percent in the third quarter--falling more in line with market predictions, according to ""CoreLogic."":http://www.corelogic.com/ Economic growth received a boost from residential investment, which up until now has not contributed much.

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""The real estate cycle is now contributing to economic growth,"" CoreLogic economists stated in its December report.

""This is good news,"" they added, ""because residential investment is the most important cyclical component of the economy.""

While disposable income increased just 1 percent year-over-year as of September, rental income of residential properties increased much more substantially.

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Rental income of residential properties, which CoreLogic defines as ""gross rents for homeowners and renters minus the associated cost of financing and other expenses,"" rose 12 percent from September last year.

Furthermore, ""[t]his growth shows no signs of slowing down,"" according to CoreLogic.

Somewhat counter-intuitively, total rental income from residential properties includes income from homeowners because analysts account for ""imputed rental income from the flow of services to homeowners.""

Therefore, some of the rental income growth recorded comes from actual homeowners.

CoreLogic attributes the 12 percent growth to ""fundamental shifts in the housing market, driven by a large increase in affordability and rising rents.""

When separating out investor rental income, CoreLogic found the 2011 total was $126 billion. Homeowner rental income was a larger $257 billion.

Not only was the total income in 2011 larger among homeowner rental income, but CoreLogic also found the growth rate over the five years ending in 2011 was also greater in the homeowner category.

Homeowner rental income grew about 28 percent per year over the five-year period, while investor rental income grew 15 percent per year.