Demand for single-family rental homes is off the charts and shows no signs of abating anytime soon, and that is pushing rents sky-high. This has allowed the largest owner of houses in the US to raise rents.
According to Bloomberg, Invitation Homes Inc., which owns approximately 80,000 homes across the country, increased rents by 11% in the third quarter. They raised rents by 8% on renewals and 18% on new leases. Geographically, much of the new increases were found in the Southwest, where rents increased 30% in Las Vegas and 29% in Phoenix.
"It's a little bit crazy," CEO Dallas Tanner told analysts during a Thursday call. "There just isn't enough quality housing available right now."
In a separate report, CoreLogic wrote this week, on a national basis, rents rose 9.3% in August from the same period last year. Data showed that all top metro areas tracked by the real estate research firm recorded positive rent growth. The highest growth areas were Miami at 21%, Phoenix at 19%, and Las Vegas at 15%.
"Converging economic trends are driving a surge in single-family rent prices, and consumer confidence has driven an uptick in demand for both renters and buyers," Molly Boesel, an economist at CoreLogic, said who was quoted by CNBC.
"The ongoing preference toward more living space — and slim for-sale inventory — is forcing would-be buyers back into renting, putting significant strain on the single-family rental market," Boesel said.
However, Lawrence Yun, the National Association of Realtors' chief economist, believes that surging rents could lead to more homebuyers to avoid rising inflation.
Because if you can't afford to rent, you can afford a million-dollar starter-home?
Needless to say, rising home prices and rents is more bad news for whatever is left of the middle class. Most Americans will soon be priced out of owning a home and stuck in a renting society where more and more of their incomes are used for shelter expenses, unable to save for a downpayment.