Tag Archives: Rent prices

Demand for distressed properties from investors is contributing to the recovery, not creating an artificial one, according to Pro Teck's Home Value Forecast for April. One of the catalysts driving the housing market rebound has been large investment funds, which are buying distressed single-family homes to be used as rentals. ""These funds have also been renovating homes, which has helped to improve the overall conditions of the surrounding neighborhoods and provided a positive injection of capital,"" said Tom O'Grady, CEO of Pro Teck.

As new construction in the apartment sector takes form, occupancy remains high but rent growth is beginning to slow, according to the latest research from Carrolton, Texas-based RealPage, a software provider for apartment communities. However, RealPage does not see new construction as a threat to the strong rental market nationwide. Apartment occupancy currently stands at 94.8 percent in the core 100 metro areas measured by RealPage MPF, while rent growth slowed from 4.8 percent at the end of 2011 to 2.6 percent at the start of this year. California markets topped the list of markets with the highest annual rent growth for the first quarter of this year, according to RealPage.

With the spring house hunting season upon us, Trulia reported a 7.2 percent year-over-year increase in asking prices on the national level. On a seasonally adjusted basis, prices rose 1.1 percent month-over-month. On the other hand, rent price growth--for single-family homes, at least--showed signs of stagnancy in March. Nationally, rent for single-family homes increased 0.1 percent year-over-year. ""Why have rents stopped rising on single-family homes? More supply,"" explained Jed Kolko, chief economist at Trulia.

With institutional investors playing a major role in the home-buying market as they snagged tens of thousands of homes in 2012, RealtyTrac set to work to determine which markets still offer the best opportunities for investors intending to purchase single-family homes to rent. Topping the list of top 20 markets were Memphis, Tennessee; Saginaw, Michigan; Toledo, Ohio; Ocala, Florida; and Las Vegas, Nevada. In Memphis, Tennessee, the median sales price for a three-bedroom home is $72,605, and investors can expect a cash purchase capitalization rate of 10.38 percent.

Reports may tout data pointing to a housing recovery, but nearly eight in 10 Americans are unconvinced, according to the How Housing Matters survey conducted by Hart Research Associates. In the survey, 58 percent of Americans said they believe we are still in the middle of the housing crisis, while another 19 percent said the worst is yet to come, which means 77 percent hold the belief that the crisis is still here. Just one in five, or 20 percent, believe the crisis is ""pretty much over.""

Nearly two-thirds of millennials expressed an increased interest in buying, and it's not because they are tired of apartment living, according to a survey from Pulte Group, Inc., a national homebuilder. The PulteGroup Home Index Survey (PGHI) showed 65 percent of renters between ages 18 to 34 with an annual income of at least $50,000 said their intention to buy has increased significantly or somewhat over the past year. The majority of millennials, or 52 percent, are interested in buying because they view a home as an investment and have a desire to own and build equity.

Lower rental yields might cause investors to lose interest in the housing market, but according to Capital Economics, that scenario is unlikely to play out this year. Currently, the increase in home prices is outpacing the rise in rents, which ""is weighing on rental yields,"" the firm noted in a report authored by the property economist Paul Diggle. However, Capital Economics stated the reduction in rental yields is actually ""very gradual"" and the ""the total return from housing remains attractive."" Thus, investors, who analysts say are driving the recovery, are not expected to exit the market just yet.

Home values maintained their upward trajectory in February after climbing for the 16th straight month, according to Zillow's Home Value Index. The index registered a national value of $158,100 last month, which represents a slight 0.1 percent increase from January and a 5.8 percent jump from February 2012, Zillow reported. The yearly gain is the second largest increase since August 2006. In January, the year-over-year gain was 6 percent. At the same time, all 30 of the largest metros tracked by the online real estate marketplace saw monthly and yearly price growth.

Home price gains may be outpacing increases in rent, but the cost of being a homeowner is still much less than that of a renter, according to Trulia’s Winter 2013 Rent vs. Buy report. After factoring all cost components, Trulia found buying a home is 44 percent cheaper than renting, down slightly from 46 percent a year ago. Yet, in the last year, asking home prices showed a 7 percent gain compared to a 3.2 percent increase in rents during the same time period, according to data from the real estate site.

The rental market may be flourishing, but finding decent, affordable housing is still a challenge for many renters, especially among the lower-income households, the National Low Income Housing Coalition revealed in a recent report titled Out of Reach 2013. A person working full-time would need to make about $18.79 an hour to afford a decent apartment, yet the hourly wage earned by the average renter is $14.32, according to the report. Among extremely low income (ELI) renter households, affordable housing is an even greater issue. The report estimates there are 10.1 million ELI renters in the country, and 76 percent of the ELI rental segment spends over half of their income on housing costs.