Sun State Savings

Home sales data is eas­ing so far in this cal­en­dar year. Home resales and new con­struc­tion have dropped to multi-month lows and, in many cities, home sup­plies are ris­ing. One hous­ing sec­tor that’s not slow­ing, how­ever, is rentals.

The rental mar­ket is booming.

As reported by the Wall Street Jour­nal, the aver­age apart­ment vacancy rate is 6.6% nation­wide, down from 8.0% last year. In addi­tion, the num­ber of occu­pied apart­ments rose by more dur­ing Q4 2010 than dur­ing any com­pa­ra­ble period of the last 10 years.

It’s a major rea­son why rents are up 2.3%.

Some areas, how­ever, fared worse than oth­ers. This study of rent increases as pub­lished on MSNBC, for exam­ple, lists the 10 U.S. cities in which rents increased the most last year. And they may not be the cities you’d expect.

In order:

1. Greenville, SC (+11.2%; $669 aver­age monthly rent)
2. Chat­tanooga, TN (+10.4%; $726 aver­age monthly rent)
3. Savan­nah, GA (+8.4%; $866 aver­age monthly rent)
4. Port­land, OR (+8.1%; $875 aver­age monthly rent)
5. San Jose, CA (+8.0%; $1,716 aver­age monthly rent)
6. Nashville, TN (+8.0%; $786 aver­age monthly rent)
7. Tacoma, WA (+8.0%; $900 aver­age monthly rent)
8. Den­ver, CO (+7.5%; $873 aver­age monthly rent)
9. Wash­ing­ton, DC (+7.4%; $1,473 aver­age monthly rent)
10. Raleigh, NC (+7.4%; $785 aver­age monthly rent)

Big cities New York (#18), San Fran­cisco (#19), and Chicago (#24) showed mod­est gains, by comparison.

Not every­one wants to be a home­owner, but renters are fac­ing a squeeze. With mort­gage rates his­tor­i­cally low and home val­ues slow to recover, in many cities, the cost-benefit analy­sis is shift­ing toward buying.

Tags: Rent,Homeownership,Cost-Benefit

This entry was posted on Wednesday, March 23rd, 2011 at 12:53 pm and is filed under The Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.