TRENDING: THE UPS AND DOWNS OF RENTING
The country's rent index ticked up by 0.1 percent from June to July, representing a slowdown in rent growth following three straight months in which month-over-month growth topped 0.4 percent. From March to June, rents increased by 1.3 percent, the fastest growth over any three month period since the summer of 2017. The leveling off of prices this month may indicate that we’re nearing the end of the peak summer renting season.
According to data from property analytics firm CoreLogic, rents grew just 2.9% in June, down from a 3% rise last year. Month over month, RENTCafe shows rents rose just $3, hitting $1,469 nationally.
Rent growth tends to be higher in the late spring and summer months due to seasonality in the market, and the robust growth we saw from March through June was indicative of a particularly tight rental market this season. It remains to be seen if this spike was temporary, or if it signals the end of a protracted stretch of relatively stagnant rent growth.
But it’s not all good news for renters, especially those in the South. Rents in the region are still rising at breakneck speeds, with Phoenix seeing a 7.1% jump over the year. Nearby Tucson also saw a near-7% uptick.
Though fast-rising rents are largely a Southern problem for now, it might not stay that way for long. Increasing rental demand and declining construction rates could soon spell faster rent hikes across the country.
U.S. Census data shows that new renter households outweighed owner households last quarter, rising for the second time this year.
According to Ralph McLaughlin, deputy chief economist at CoreLogic and as reported by Forbes this could indicate the start of another upward trend in renting, as this is the second consecutive quarter with increasing renter households and the first with more new renters than owners since the end of 2016.
Throw in that apartment construction dwindling and it could mean higher rents are in the future. Data shows that just 299,000 new units are expected to enter the market this year which is an 8.2% downslide from last year.
Houston rents have remained flat over the past month however, they have increased marginally by 0.6% year-over-year. Currently, median rents in Houston stand at $845 for a one-bedroom apartment and $1,034 for a two-bedroom. Houston's year-over-year rent growth lags the state and national averages, which both stand at 1.6%.
RENTS RISING ACROSS THE HOUSTON METRO
Throughout the past year, rent increases have been occurring not just in the city of Houston, but across the entire metro. Of the largest 10 cities that we have data for in the Houston metro, 7 of them have seen prices rise. Here's a look at how rents compare across some of the largest cities in the metro.
- Sugar Land has seen rents fall by 1.3% over the past year, the biggest drop in the metro. It's also the most expensive city in the Houston metro with a two-bedroom median of $1,560.
- Conroe has seen the fastest rent growth in the metro, with a year-over-year increase of 2.8%. The median two-bedroom there costs $1,103, while one-bedrooms go for $901.
- Pasadena has the least expensive rents in the Houston metro, with a two-bedroom median of $1,009; rents increased 0.2% over the past month and 1.7% over the past year.
Houston rents more affordable than many other large cities nationwide as reported by the Apartment list.
- Rents increased slightly in other cities across the state, with Texas as a whole logging rent growth of 1.6% over the past year. For example, rents have grown by 3.3% in Austin, 2.5% in San Antonio, and 2.1% in Dallas.
- Houston's median two-bedroom rent of $1,034 is below the national average of $1,191. Nationwide, rents have grown by 1.6% over the past year compared to the 0.6% increase in Houston.
- While Houston's rents rose marginally over the past year, many cities nationwide also saw increases, including Phoenix (+3.7%), New York (+1.8%), and DC (+1.7%).
- Renters will find more reasonable prices in Houston than most similar cities. For example, San Francisco has a median 2BR rent of $3,126, which is more than three times the price in Houston.
As rents have increased marginally in Houston, a few similar cities nationwide have also seen rents grow modestly. Houston is still more affordable than most comparable cities across the country.
About the writer: Shaura Cuyan writes about all the hottest Real Estate trends and predictions for Summit VA Solutions! She has previously written for a number of freelancing gigs and writes her own blog on lifestyle and current issues. She is a Graduate of Bachelor of Arts in Communication, taking up her Masters in Development Communication.