Home prices fell 4.6 percent as rents rose, according to data from Zillow. The real estate data firm’s rent index revealed that more than 69 percent of metropolitan markets tracked displayed increasing rents, compared to 7.3 percent which posted higher for-sale home prices.
This suggests high demand of rental housing and availability of retail properties, which may be beneficial conditions for many investors. Property management companies can help those with new units prepare and market them to area tenants.
“The flourishing rental market is the silver lining to the nation’s housing downturn,” said Zillow Chief Economist Dr. Stan Humphries. “We haven’t had a good way to quantify what is happening with rental rates until now, and the inaugural Zillow Rent Index shows us a healthy and growing rental market across the majority of the country, even as home values continue to fall.”
Rents fell 0.3 percent from December to January, which the report indicates is unlikely to be a meaningful sign in the face of the larger trend. Areas such as Chicago and Minneapolis-St. Paul displayed more extreme results than the average, with rents rising as much as 9.1 and 11 percent, respectively.