One Sign The Housing Bust Could End Soon

March 28, 2011

in News

One Sign The Housing Bust Could End Soon

It’s not usually welcome news when the landlord hikes your rent. But for the housing market, rising rents may be one of the most hopeful signs in years. The markets for rented and purchased homes usually move in opposite directions. When the housing market is hot and more people are buying homes, rents tend to stay low or go down, because there are fewer renters. But when high interest rates or other factors cool the housing market, more people rent. Since it takes awhile for builders to add more units, the supply-demand mismatch drives rents up. Research firm REIS estimates that nationwide, rents will rise an average of 3.4 percent in 2011, which is more than inflation or incomes are likely to rise. In cities like San Jose, Calif., Washington, D.C., Seattle, and New York, rents will go up by more than average. And in a few select neighborhoods, rent increases could exceed 10 percent. And if rents are going up by more than inflation or incomes, renters will start to think about buying. [Read this article]

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