The Cost of Rent Is Higher Than Ever -- Here's Why

By John

While the housing market has yet to recover from the financial crisis, there's one corner of the real estate industry that's soaring: rental property. Over the past year alone, the nationwide average cost of rent has jumped by 4%, or nearly three times the rate of inflation.

What's behind this trend? As I explain more fully in the following presentation, the answer is twofold.

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In the first case, there's been a material drop in the homeownership rate. After peaking at nearly 70% a decade ago, its fallen to just over 64% according to a recent report(link opens a PDF) from the Mortgage Bankers Association. This has led to a surge in demand for rental units across the country.

And in the second case, given the increase in demand, the industry hasn't been able to respond quickly enough with supply. The net result is that the nationwide vacancy rate is at its lowest level in recent history.

To learn more about these trends, as well as what one prominent economic commentator is expecting in the future, scroll through the following presentation.

The article The Cost of Rent Is Higher Than Ever -- Here's Why originally appeared on

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