RALEIGH, N.C. (WTVD) — Nationwide rent prices held relatively steady in July despite the median rent in July hitting another record high for the 17th month in a row, according to Realtor.com.
The median rent reached $1,879 in July, which is 12.3% higher than last year, but that represents the lowest year-over-year growth rate since August of last year. Urban areas saw faster rent growth, with cities such as Miami, New York and Boston with the largest rent increases.
In the Raleigh Metro area, Zillow said typical rent is $1,786, down 0.80% since June.
“I started out at $1,800, now it’s $2,000,” Raleigh resident Alex Welch said. “So it’s going up there.”
Welch, who lives at Hue in downtown Raleigh, said despite the rent increase, it’s still worth it.
“They could jump it up by a bit more, I’d still want to live here,” Welch said. “It’s in a great location.”
Studio unit rents continue to grow at a faster rate than one- and two-bedroom unit rents, according to Realtor.com. But for Raleigh resident Tara Rajani, who lived in a downtown apartment for a year after moving from D.C., the rent for a one-bedroom unit was not worth it.
“I definitely get more here,” Rajani said. “But if I went month to month here, it’s way more expensive than my month-to-month was there.”
Rajani, who’s not renewing her lease, said she bought a place instead. But Realtor.com’s survey finds that the rising cost of housing is the leading cause of financial strain among renters.
“As far as people buying, the market is insane,” Rajani said. “So it’s like hard to buy, and then it’s expensive to rent, so people are kind of stuck between a rock and a hard place.”
Landlords are also having to adjust, according to Thomas Babb at Triangle MLS.
“Based on a coworker I have that does have multiple rental properties,” Babb said. “The increase in property taxes has kind of forced him to increase the rent on some of his tenants. Not necessarily because he would like to … but with these higher interest rates and higher property taxes, there’s just almost no choice.”
Babb said in the last couple of months, we’ve seen an increase in inventory and the amount of houses we have on the market is starting to expand slightly. The same goes for units, according to Triangle Apartment Association’s Dustin Engelken.
“We are now producing more units than we’ve ever produced before,” Engelken said. “We have another 13,000 units that are in some stage of development, and so I expect that that rates can continue for the next couple of years.”
Engelken said that’s resulting in higher vacancy rates, which generally means lower rent.
“The vacancy rate now is ticked up to about 6.25%,” Engelken said. “And I think over the next year or two, we could get as high as 9%, or 10% as a lot of these new units come in line. So anytime you’re seeing vacancy rates creep up, you’re going to see rents either moderate in growth or actually go down.”
Despite being in a good place in terms of rent increases moderating, Engelken explained how some challenges remain.
“The one caveat I would offer is that a lot of our new construction is happening on the higher end of the market,” Engelken said. “And so if you’re looking for a very low affordable market-rate rent, those are still going to be tough to come by.”
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