Higher Rents Still Affordable

The headlines of double digit rent increases in California and Miami tend to “fly over” the rest of the US where rents are 4-5% higher in some markets in line with low inflation for fuel, food and other living expenses so are absorbed by Tenants without impacting the demand for home purchases. In fact, a Trulia report on the top 25 home rental markets as of June 2016 that rents had fallen in the past year. Even if more Tenants scan Zillow or Trulia for lower rent options, the number of affordable rental home listings has decreased just as all the new construction of apartments has been in Class A and not in the affordable price range. So the reality is that budgets must increase for rent and decrease for other expenses since there is no exit from the rental path for those Tenants who cannot afford to become homeowners.