Houston Texas Rents to Flatten in 2016

Humble Texas Renter

HOUSTON, TX. – After months of rent increases thanks to the booming economy many experts are predicting that rents will start to flatten out in 2016 and the rapid increases that we’ve seen over the last 12 months will soon become a thing of the past.

This is good news for the Houston Rental Market since the area has certainly been hit hard since the drop in oil prices but the question is will slower rental appreciation actually help renters since rents have been increasing faster than incomes over the last 24 months?

National median rent at the end of 2015 was $1,381, and is expected to increase slightly to $1,396 over the next 12 months.

The slowdown in rents means that, by the end of the year, they will be rising at a slower pace than incomes in many markets.

In December, home values rose 4 percent to a Zillow Home Value Index of $183,500.

Rent appreciation will level off over the next 12 months, slowing to an annual rate of 1.1 percent by December 2016, according to the new Zillow® Rent Forecasti. The national Zillow Rent Indexii at the end of 2016 is projected to be $1,396 — compared to $1,381 in December 2015.

Zillow is forecasting a decrease in the rate of rental appreciation amid a rental affordability crisis that has renters in some markets spending almost half of their income on rent.  Some of the fastest growing metros had double-digit annual rental appreciation at the end of 2015.

Zillow expects rental appreciation to slow down most significantly in Nashville, Tenn., San Francisco, Portland, Ore. and Denver. Rents in San Francisco saw 12.5 percent appreciation in 2015. Zillow forecasts rent in San Francisco will grow half as fast in 2016 — 5.9 percent.

Even with the slowdown, rents will remain unaffordable in many of the major markets across the U.S., especially on the West Coast. Renters in San Francisco and Los Angeles can expect to spend 40 percent of their income on a rental paymentiii.

“Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been,” said Zillow Chief Economist Dr. Svenja Gudell.

“The slowdown in rental appreciation will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up.”

The slowdown in rental appreciation indicates that supply of new multi-family homes is catching up to demand. Substantial new housing supply is becoming available in Atlanta, Denver, Portland, Seattle, and other markets.

The Zillow Home Value Index rose 4 percent year-over-year in December 2015, to $183,500, according to the Zillow® December Real Estate Market Reports.

Source – rentalhousingjournal.com 

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Rental Market News – Rents Show No Sign of Letting Up

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By Vestpro Residential Services, LLC

HOUSTON – Thanks to the recent rental market news from the U.S. Labor Department we know that rents continued to increase by 3.5% year-over-year in the month of May 2015.

Rent is without a doubt one of the biggest costs consumers nationwide have to pay while food prices have also risen by 1.6 percent as well during the same period of time but one interesting thing to report is that clothing costs have decreased by 1.5 percent.

What Does This Mean To You?

One of the good things about the current economy is that after the recent havoc the economy has seen in the China and United States most economists and investors are predicting we’re not going to see an increase in mortgage interest rates this year and what’s shocking is that we could even see them lowered to 0 percent.

These factors mean that NOW is a great time for you to buy a rental property in Houston or elsewhere across the United States if you’ve been thinking about adding property to your portfolio.

How to Get Started With Buying Rental Property

To get started with buying rental property in Houston Texas or elsewhere across the United States make sure you do the following:

  1. Know what type of rental property you are searching for (example – 3 bedrooms, 2 bathrooms or 1,200 square feet). This step is important because knowing your ideal rental property will keep you from buying a more expensive rental because it has better features.
  2. Establish your budget and know the costs – This step is vital because it’s easy to go over budget when buying rental property and you will quickly realize that you can’t charge enough rent to cover your costs.

Learn More

To learn more rental market news, or to speak with us about our property management services contact us today by calling (832) 498-0016 or click here to contact us online.

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