Will Higher Rent Rates Lead to a Boost to Home Sales


According to a recent article from Bloomberg Business (July 28th, 2015) a short supply of vacant rental units is pushing rents higher. The Census Bureau's U.S. rental vacancy rate is the government entity that tracks unoccupied properties says the market fell to 6.8% in the second quarter of 2015, the lowest level in over 31 years. This most likely indicates that rental inflation will continue into the foreseeable future. Already in the past 12 months rents have climbed 3.5% matching the largest increase since 2008 when so many homeowners were being displaced due to the turn in the economy. 

The rise in demand this time according to Census data is due to the surge in household formation. Last year alone an estimated 1.6 million new households came into the market. Ed Stansfield and Andrew Hunter are economists at Capitol Economics Ltd. They have noted that rents will grow an annual rate of 5% both for 2015 and 2016.

Rents rising at this rate should make home ownership much more attractive especially with money still very cheap to borrow. Coupled with the improving economy, jobs growth, and increased incomes home ownership should see a bump. If Naples is any indication it has been very difficult to find rentals in Naples both annually and seasonal. The appreciation in property value over the past few years has also attracted many people who are on the fence between renting and buying.

For more information on the Naples, Florida market please contact Adam Carriero at 239-641-3876 or [email protected].

Please contact Adam Carriero at [email protected] or 239-641-3876. I am available for consultation on the Naples, Florida, market.


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