It looks like there could be some reprieve coming soon in the average cost of rent. That would be welcome news for renters who have been paying ever higher monthly rents since vacancy rates starting falling and rental rates started climbing in late 2009.
Apartment vacancies peaked at 8% in the last quarter of 2009 which was a 30-year high and also the highest vacancy rate ever published by Reis. At that time, with so many apartments sitting empty, the national average effective rent hit the recessionary low of $964 per month.
As of Q1-2013, the national apartment vacancy rate sits at 4.3% and the national average effective monthly rent is $1,054, according to Reis. Although the current state marks the slowest growth in more than a year, it also marks a 9% increase in rent rates in just four years! Compare that to the growth in income and it’s easy to understand why renters would be happy to see this growth trend stopped cold in its tracks.
This year multifamily builders are forecasting about 100,000 new apartment units will come into play in the tightest of markets. Combine that with a still sluggish economy and modest improvements in the for-sale market and economists suggest there could be a reset between supply and demand leading to lower rental rates in some markets.