Rising Interest Rates Boost San Diego Rental Market
Increases in mortgage interest rates are pushing more people into the rental market in San Diego, according to commercial real estate brokerage firm Marcus & Millichap.
The Los Angeles Times reports that the firm’s fourth quarter analysis found that the gap between between average monthly mortgage payments and average rent has grown to $1,724, making renting the only option for many residents. This is a roughly $500 increase over last year.
Marcus & Millichap also predicted that rent would increase 7.8 percent by the end of 2018 over a year prior, due in part to an increase in demand and a large amount of new and expensive multi-family buildings becoming available. But inaccessible mortgage rates will likely keep many San Diegans renting for longer.
While it might seem like the county is getting over-saturated with new apartments, there still isn’t a lot available for those searching. The vacancy rate is below 3 percent in more than half of the metro’s submarkets, Marcus & Millichap said. The Santee-El Cajon- Lakeside market has the lowest vacancy, 2.2 percent, the firm said.