HousingWire – What’s behind the recent surge in rental growth?

Reis in the News

By Caroline Basile
Source: HousingWire – What’s behind the recent surge in rental growth?

Is the recent surge in rental growth an indicator of tightening rental markets?

In March, rental growth increased to 3.7% from last year, a 12-month high, according to the latest Consumer Price Index.

According to a new report from Capital Economics, analysts are optimistic about the rental market’s outlook but were surprised at the boost in growth. So, what’s behind this acceleration and will it continue?

CE said it suspects the recent rise in earnings growth may be the cause.

“Instead, and in contrast to what we had expected, the rise in earnings growth to a 10-year high looks to have given landlords some latitude to increase rents for existing tenants,” the analysts wrote in their report, which cites data from the Census Bureau, Zillow, Reis, and Refinitiv. “That will support rents this year but, with earnings growth then set to slow, annual rental growth will end 2020 at around 3.2%.”

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