The American rental market is reaching new heights even as the nation is going through a housing slowdown. With the U.S. housing market continuing to slump and home sales on the decline, people are increasingly opting for rentals. Home owners are awaiting the housing market to stabilize before venturing into purchase of homes. Renting a house seems to be a better option now than buying one, especially in cities where the home prices are still inflated. A rise in the mortgage rates over the past few months has compounded to this trend.
All this has triggered a hike in the average rent this year, especially in places where home sales have remained strong. In San Francisco, for instance, rents are up by 3 % in the last three months, the highest increase registered thus far. The rental vacancy rate has come down leading to an increased demand for apartments. The national vacancy rate has fallen by 5.8 % in the second quarter, from a 6 % decrease in the first.
The following are the top 10 markets where the rental rates for homes are rising the fastest. The average asking rent in the second quarter and the percentage increase from the first quarter are given along with the second quarter's vacancy rate.
1. San Francisco, California. Average asking rent - $1,757, increase from the first quarter - 3 %, vacancy rate - 4.4 %.
2. San Jose, California. Average asking rent - $1,473, increase from the first quarter - 2.4 %, vacancy rate - 3.9 %.
3. New York City, New York. Average asking rent - $2,657, increase from first quarter - 2.1 %, vacancy rate - 2.4%.
4. Seattle, Washington. Average asking rent - $973, increase from first quarter - 2 percent, vacancy rate - 4.5 %.
5. Oakland-East Bay, California. . Average asking rent - $1,300, increase from first quarter - 1.8 percent, vacancy rate - 5 %.
6. Orange County, California. . Average asking rent - $1,493, increase from first quarter - 1.7 percent, vacancy rate - 3.5 %.
7. Washington, D.C. . Average asking rent - $1,301, increase from first quarter - 1.7 percent, vacancy rate - 4.3 %.
8. Baltimore, Maryland. . Average asking rent - $945, increase from first quarter - 1.7 percent, vacancy rate - 5.8 %.
9. New Haven, Connecticut. Average asking rent - $1,065, increase from first quarter - 1.6 percent, vacancy rate - 4.5 %.
10. Philadelphia, Pennsylvania. Average asking rent - $981, increase from first quarter - 1.6 percent, vacancy rate - 4.2%.
However, the opposite is happening in bubble markets where an increasing number of home owners are renting out their homes. Rents are still low in highly competitive markets such as Florida which has a high inventory of apartment buildings that went up during the housing boom.
