Landlords are raising rents in the US
[BOSTON] The US housing slowdown is turning out to be a gift to apartment landlords. After all, those people who aren't buying still need somewhere to live.
Data from Zillow released on Thursday shows that home-price appreciation continued to slow in April from a year earlier, driven in part by softening West Coast metros like San Jose and Seattle. The company also reported the first nationwide monthly price dip in more than seven years - albeit just 0.1 per cent. At the same time, rent growth accelerated, climbing by 2.6 per cent on an annual basis, after a lull in 2018.
Americans pulled back from home purchases last year after mortgage rates spiked, exposing the underlying affordability problem in the property market. Many people piled into rentals, where landlords were offering concessions after a period of overbuilding higher-end units. That increased demand helped drive up what people were willing to pay for an apartment.
Rents and home values tend to move together over the long-term, said Skylar Olsen, Zillow's director of economic research. "But, in this case, what we're seeing is a little different."
More broadly, the challenge for the US housing market is scarcity. As millennials - one of the largest US generations - reach prime home-buying age, they're finding that the supply of entry-level houses hasn't nearly kept pace with their numbers. That could force them to rent for longer as they save up to buy the homes that are available, Mr Olsen said.
BLOOMBERG
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Property
Homebuyers shun new real estate in Vancouver, hurting builders
US pending home sales jump in March to hit highest in the year
Blackstone strikes US$1.6 billion student housing deal with KKR
European real estate deals slump to lowest level in 13 years
Singapore Q1 industrial rents rise further as occupancy dips and prices fall: JTC
Condo resale volumes rebound in March; prices inch up 0.4%: SRX, 99.co