A sign in front of an apartment building states "For Rent" in San Francisco, California.
The nation's housing market isn't following seasonal patterns this year, as evidenced by the new records for apartment rent growth and Occupancy set in November. Heading into winter, rent growth and Occupancy are usually cooler.
RealPage, a real estate technology platform, reported that apartmentOccupancy hit a new high of 97.5% in November. The long-term norm for the rate is about 85% over the past three decades.
In November, the annual increase in asking rents for new move-in leases was 13.9%. When there is turnover in a unit, renewal lease rent growth is usually slower, but it has still been growing at 8% even during the later part of the year.
The demand from renters is very strong. Greg Willett, chief economist at RealPage, said that the economy has done a better job in high- paying jobs than it has in lower paying jobs.
This is usually the time of year when landlords offer incentives or cut lease prices because they see lowerOccupancy. The for-sale housing market has more demand than supply, as it is also in the rental market.
The for-sale market is not as strong as the rental market. John Burns, CEO of John Burns Real Estate consulting, said that the rent increases were something he had never seen before.
Rent prices were up in November. Rent prices usually decrease in the fall months, so it is notable that that is below the growth seen in the spring and summer months.
The high prices in the for-sale market have led to a surge in rental demand. Fewer people are choosing to live with roommates. In some markets, owner-occupant homebuyers are being pushed out by investors.
A lot of people are living on their own because of the work-from- home and the other things, and that is the reason for the surge.
Census figures show that household formation dropped off abruptly when Covid-19 hit the U.S. It began to climb again within a few months and has been increasing in the last six months.
Older homeowners who want to cash out at the top of the market can do so because of high prices in the for-sale housing market. They are taking up more supply and inflating rents by moving into luxury rentals.
Rent growth is strongest in West Palm Beach, Tampa and Phoenix. Rent growth was above 20% in Austin, Fort Lauderdale, Las Vegas, Jacksonville, Atlanta, Salt Lake City, Raleigh/Durham and Miami.
Rent growth in the Midwest is weak. Minneapolis saw the smallest rent increase of 4% from a year ago.
