The Federal Reserve sees no signs of
inflation, but don’t tell that to renters of housing.
Rent growth in September was 5.2 percent from a year earlier, the highest since 2011,
writes CNBC reporter Diana Olick, citing data from Axiometrics. Annual rent growth was at 4.1 percent a year ago, still on the high side.
"The eight months the rate has been above 5 percent is the longest sustained period of strength we have seen. The last growth cycle was only four years, and this cycle is already five years long — with no sign of stopping," said Stephanie McCleskey, vice president of research at Axiometrics.
Some studies have shown that it is now more affordable to buy a home than to rent, Olick reports, but rental demand has remained strong because of a lack of homes for sale, especially for lower-income people, the desire by millennials to remain mobile, a downsizing baby boom generation and high rents that prevent people from saving for a down payment.
Personal income grew 4.2 percent in August from the prior year, according to the U.S. Bureau of Economic Analysis. It has averaged about 3.9 percent annually for the four-year period ended in August, not enough to keep up with rent increases.
"New inventory coming to market is weighted to the high end; it's urban, Class A, with a rich set of amenities, targeting the coveted college-educated millennial," Sam Chandan, president of Chandan Economics, told CNBC. "Overall, we still have an affordability crisis in the United States with rents rising faster than incomes for the fourth-consecutive year."
The rental rate for single-family homes in the metropolitan area of Fort Myers, Fla., increased 24 percent in the 12 months ending in September,
according to Bloomberg News.
Single-family rents there grew faster than in any other U.S. metro area over that period, according to the news service, which cited a report by RentRange, which provides data and analysis to real estate investors.
Single-family renter households increased by 3.9 million, or 34 percent, from 2006 to 2014, according to the U.S. Census Bureau.