Apartment metrics in the first quarter of 2015 demonstrated that things are still going strong, according to Axiometrics early release figures. The 4.9% annual effective rent growth rate is the highest since the third quarter of 2011 and the highest first-quarter rate since 2006.
Northern California again dominated the list of the top 50 apartment markets. In the fourth quarter, that region had four of the top five metros on the chart. The only change among the top five was that San Francisco, ranked number two, and San Jose, ranked number four, swapped places from the fourth quarter.
According to real estate research firm REIS, U.S. apartment vacancy rate fell from 4.2 percent in the fourth quarter to 4.1 percent in the first quarter, while new construction declined to its lowest level since the first quarter of 2013.
The Wall Street journal reported that there is “solid job growth, single-family home affordability and the continuing trend of people choosing to rent instead of buy all contributed to the first-quarter metrics.”
The average renter paid $1,114 per month in the first quarter of 2015, $6 more than in the fourth quarter of 2014. This resulted in a quarter-to-quarter effective rent growth rate of 0.5%, which matches the same rate recorded in the first quarter of 2014.
According to REIS, New York remained the most expensive market in the country with effective rents registering $3,200 per month, 45 percent more expensive than the second priciest market, San Francisco.
Single-family rental properties have been around for a very long time, but they have become a hot commodity only in the past few years. According to the U.S. Census Bureau, the number of rental homes reached an all-time high of 14.9 million homes in 2013, an increase of almost three million rental homes since the end of the Great Recession in 2009.
This research reveals that the United States rental market is remaining strong as families and individuals opt to rent rather than purchasing their own homes.