Call (253) 999-2371 Paul Chunyk is a Realtor in Tacoma, WA. See our new homes for sale in Tacoma, Washington, and all of Pierce County. Search the Tacoma Real Estate Market - condos, mansions, luxury homes, and more

Greatest Rental Price Increase in 6 Years

Rentals are in hot demand. This year has seen the greatest rental price increase in 6 years. Why? Because people are choosing to rent instead of buy a home, causing the U.S. to reach the lowest national vacancy rate in 20 years.

In November, rent inflation reached 3.5%. This was the greatest increase since November of 2008, following a 3.3% increase in October. In 2008, the cost of renting a home began a sharp decrease that continued through part of 2010. May of 2010, the economy began to stabilize and an increase began. It has been continuously on the rise, with a few decreases here and there, reaching its greatest inflation in November.

The increase in rent is largely due to the increase in demand for rentals. The rental vacancy rate hit the lowest it has been in 20 years. As the demand has increased due to people either not wanting to purchase a home or not being able to afford buying a home, the prices of rentals has risen. In contrast, from 2008 to 2010, the vacancy rate of rentals increased dramatically, causing the prices to drop. Since 2010, the vacancy rate has been decreasing as more and more people are looking to rent homes.

What does this mean? Construction crews across the U.S. are being put to work building more rentals. The new rentals are not expected to be able to keep up with the demand for rentals. Rent is still predicted to climb. There are areas, like San Diego and Los Angeles that are going to struggle with keeping up with the demand for rentals. Their vacancy rate is predicted to reach a low. While other cities, more in the Midwest are going to have a higher vacancy rate, making it easier and cheaper to live.

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