U.S. apartment rents increased in the first quarter at their slowest pace since late 2011 amid a wave of construction that will further test landlords’ ability to raise rates, Reis Inc. (REIS) said.
Effective rents, or what tenants pay after any price breaks from owners, averaged $1,054 a month, up 0.5 percent from the fourth quarter, according to the property-research firm. Landlords’ asking rents also climbed 0.5 percent, to $1,102. It was the slowest growth for both measures in five quarters. Vacancies, which for the past year have been at the lowest level in a decade, dropped to 4.3 percent from 4.5 percent in the fourth quarter and 5 percent a year earlier.
“Given how tight vacancies have become, rent growth ought to be stronger,” Victor Calanog, chief economist of New York- based Reis, said in a report today. Sluggish job and wage growth have raised questions about how much more landlords can increase rents, he said.
Read more...U.S. Apartment-Rent Increases Slow Amid Construction Boom - Bloomberg