By Conor Dougherty | The Wall Street Journal
Apartment landlords continued to push through hefty rent increases at the start of the year, although the pace of the rises was slightly weaker.
Rental rates increased 0.6% during the first quarter, according to data from 79 U.S. metro areas that was released Tuesday by Reis Inc., REIS -0.37% a real-estate research firm. While that was a little slower than the 0.8% rise in last year’s fourth quarter, rents were up a hefty 3.2% from a year earlier and have risen 13% since rents began their upward trajectory in 2009.
And with vacancy levels falling, rents appear poised for further growth, according to Reis, which said the rental vacancy rate fell to 4% in the first quarter, down from 4.2% in the fourth quarter and half the level in 2009.
Rental pressure has been building for years, as rising demand has run into an undersupply of apartments. With employment rising slowly but steadily, more young people are forming households, usually by leaving their parents’ residences or breaking off from groups of roommates.
At the same time, the cost of buying a home has increased dramatically during the past year as prices have rebounded and interest rates have risen from record lows. The median monthly home payment—including principle and interest—has risen 20% in the past year, said John Burns Real Estate Consulting. That has forced some entry-level buyers to continue renting.
