Rent Increases Slow Down to 4.7% Year Over Year, Thanks To New Construction
In August, rents rose nationally 4.7% year over year. That’s the smallest year-over-year increase since March. Three months ago, in May, rents were up 5.8% year over year. What’s slowing down those rent increases? One big factor is new construction: according to the Census, there was a big jump in the number of newly completed buildings with five or more units – which means more rental units are on the market to meet demand. Completed new units in multifamily buildings in July – the latest data available – were 47% higher than a year earlier.
Among the largest 25 rental markets, rents rose the most in Houston and Seattle, where they climbed more than 10% year over year in August. But renters are getting a touch of relief in Denver, San Francisco, Miami, Oaklandand Boston, where rents are no longer rising quite as fast as they were three months ago. That may not be much comfort, though, since these hot rental markets are still seeing annual rent increases of 8% or more.
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Metros with Largest Year-over-year Asking Rent Increases |
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| # | U.S. Metro |
% change in rents, Y-o-Y , Aug 2012 |
% change in rents, Y-o-Y, May 2012 |
| 1 | Houston, TX |
11.2% |
9.1% |
| 2 | Seattle, WA |
10.4% |
9.5% |
| 3 | Denver, CO |
9.9% |
10.2% |
| 4 | San Francisco, CA |
9.7% |
13.7% |
| 5 | Miami, FL |
9.7% |
10.7% |
| 6 | Oakland, CA |
9.7% |
11.0% |
| 7 | Boston, MA |
8.7% |
9.2% |
| 8 | Philadelphia, PA |
8.6% |
4.0% |
| 9 | Portland, OR-WA |
7.5% |
6.8% |
| 10 | New York, NY-NJ |
6.6% |
5.6% |