After a brief slowdown in the growth of rental prices, they were back on the rise last month, with the national average rent soaring to an all-time high, RentCafé reports. In June, actual rents in the 250 largest U.S. cities rose 2.9 percent and reached an all-time high of $1,405. Renters, on average, are paying $40 more per month than they did a year ago. Renters in Orlando, Fla., saw one of the largest year-over-year increases, at 8.4 percent. Rents averaged $1,387 there in June. Rents in Las Vegas and Phoenix also rose 7 percent and 6.4 percent, respectively.
Demand for rentals is high, fueled by the growing trend of homeowners swapping their homes for rental apartments, says Doug Ressler, director of Business Intelligence at Yardi Matrix. “Generational and demographic changes, shifting employing opportunities, policy and economic influences are impacting the housing market and turning home buyers into renters nationally,” he says. Ressler adds that rapid home appreciation and rising construction costs are having a significant impact as well. “Student loan debt, smaller household sizes, larger down payment requirements, and rising interest rates are also contributing to this change,” he says.