With tightening affordability in the homebuying market, more Americans are choosing to rent, prompting rental prices to surge over the past three months.
In the third quarter of 2018, rental prices were up 2.9 percent annually, and an increase from the annual growth in the second quarter, 2.5 percent, per real estate firm RealPage. While rent price appreciation has slowed since 2015, the trend has done something of an about-face in this year's third quarter. However, experts believe that since more supply continues to hit the market, this boost in price growth may just be a short-term change, CNBC reports.
"Momentum in the apartment market's performance during the third quarter slightly surpassed expectations," according to RealPage's chief economist Greg Willett. "Still, there doesn't seem to be a pronounced shift in the big-picture story. We are about to move into the period of seasonally slow apartment leasing that comes with the cold weather months." Apartment demand is being strengthened by an improving economy, as well as a shortage of affordable homes for sale. New household formations are rising, and renter households represent nearly a third of occupied housing, according to the U.S. Census.
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