MarketWatch has some breaking news from the National Association of Realtors: apartment rent will outpace inflation next year.
According to a forecast released in November, rent growth is expected to hit 3.9% in 2015, compared to the 4% of 2014. A consensus estimate from economists recently put the overall consumer inflation rate at about 1.9% for 2015.
Lawrence Yun of the National Associate of Realtors explains, “Low housing inventory and the sizable demand for rentals will continue to spur multifamily construction as well as keep rents rising above inflation through next year.”
The figure above, from the Bureau of Labor Statistics, shows that annual rental inflation is running at almost twice the pace of overall inflation. Responding to high demand, builders have increased their construction rates for apartments. With the increase of families who do not want to or cannot afford to buy their own homes, rent is expected to continue to rise.