High Apartment Rents Seen Pushing People To Buy Homes

With Marcus & Millichap’s National Apartment Report showing that the U.S. average for asking rents in 2011 came in at $1,061 a month, housing analysts believe more apartment residents will look to own. Some expect the average monthly rent to rise to as much as $1,101 this year, which Paul Bishop of the National Association of Realtors says should prompt more potential home buyers to “think twice before renting.” Rising rental rates are partly the result of fewer available apartments. The U.S. apartment vacancy rate fell to 5.4 percent in 2011 from 6.6 percent the year before. Analysts expect the vacancy rate to dip to 5 percent this year. Ron Witten, president of Dallas-based apartment research and advisory firm Witten Advisors, acknowledges that apartments are less affordable than a couple of years ago. He concludes, “But you have to keep in mind that we are coming off a market when rent affordability was at a 20-year high. Rents have moved up substantially the last couple of years, but only to normal levels.” | Read More