Landlords to Promote Affordable Rent to Fill Vacancies
Median rent is appreciating more quickly this spring than last in 27 of the 35 largest U.S markets, according to the May Zillow Real Estate Market Report. In some of the nation’s most expensive rental markets, median rent is appreciating more slowly now than last spring. In Seattle, for example, where annual rent growth has been among the highest in the country, rent appreciation has slowed from a 5.8% annual growth rate last spring, to a 3.3% annual growth rate now. A similar trend holds true in Los Angeles, Portland and Boston.
Across the U.S., rent growth has been holding steady at about a 2-3% annual appreciation rate for the past 11 months. Median rent rose 2.1% over the past year to $1,440 per month.
This trend affects the 32.5% of U.S. adults who identify as Renters, according to AudienceSCAN. Nearly 44% of Renters are under the age of 35 and 39.7% have annual household incomes of below $25,000.
Saving enough money for a down payment is one of the greatest hurdles to homeownership, and rising rents is one of the main reasons why saving is so difficult. Even in markets where rent growth is slowing, high prices have already been established. With mortgage rates rising and mortgage affordability deteriorating, owning a home may start to feel out of reach for many Americans.
“Over the past two years, rent growth slowed across the country as new apartments hit the market and renters with the financial means to do so increasingly became homeowners,” said Zillow Senior Economist Aaron Terrazas. “The slowdown in rent growth was most prominent in the markets that moved most quickly to add units; either because it was easy to build or because of local demands. But the ever-swinging pendulum is again on the move. This spring rent appreciation has perked back up nationwide, though it remains well within a long-term sustainable range. The ebb-and-flow of supply and demand is following slightly different timeliness in different markets, but over the past two years, we have seen similar trends in markets from the Southeast to the Northwest.”
Spring home shoppers will have 5.3% fewer homes to choose from than last year, though the pace of inventory declines has been slowing for the past 10 months.
Within the next year, only 9.4% of Renters have the intention of moving to a new or different house, according to AudienceSCAN.
May ended with mortgage rates on Zillow at 4.29%, after starting the month at 4.38%. May mortgage rates peaked in the middle of the month at 4.51%, the highest rate since the beginning of 2013, and hit a month low in the last few days of the month when rates were at 4.28 percent. Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Mortgages site and reflect the most recent changes in the market.
Landlords can advertise their rental rates best through TV ads. According to AudienceSCAN, TV is where 44.2% of Renters get their local news, and it’s also where they saw commercials within the last year that lead 56.5% of them to take action. A little over half (50.6%) of Renters also took action last year after receiving ads or coupons in their mailboxes and 49.7% responded to ads they saw on a social network.
AudienceSCAN data is available for your applications and dashboards through the SalesFuel API. Media companies and agencies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.