Reply #19: Rents Are Rising Rapidly After Long Lull

[54anickel]

Damn! Wonder when they'll juggle actual home prices for rental equivalents in the CPI calcs.

http://www.nytimes.com/2006/08/19/business/19rents.html?_r=2&ref=business&oref=slogin&oref=slogin

Mike Gain, the co-owner of a property management firm in Seattle, took a step this spring that he had avoided for years: he raised rents.

“We had been afraid to do that,” Mr. Gain said. “Over the years, we were actually reducing rents. But we increased rents by 3 to 5 percent and there were absolutely zero repercussions.”

This kind of shift is under way in many cities across the country, including Atlanta, where rents actually fell from 2003 through the first half of last year, as well as Cincinnati, Dallas and Phoenix. The only region of the country that is resisting the trend is the Midwest, where industrial job losses and other factors continue to hold rents down.

According to government data, in both June and July average rents across the country were 3.5 percent higher than a year earlier, the steepest gains in almost four years. And it is feeding into a broader rise in inflation.

The rise in apartment rents is in many ways a consequence of what has happened to home prices. As mortgage rates have begun to creep up and as home prices have soared out of reach of many Americans, many renters who a couple of years ago might have bought a home are staying put. This is tightening the rental market to the point where apartment owners now have more leverage to demand higher monthly payments.

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