Rent Jumps 11.6% in 2010, Housing Prices Slide 9.8%
Rental prices across the US increased 11.6% in 2010, growing from a national average of $1181 in January 2010 to $1319 by December. The steady increase in rental prices was inversely matched by falling prices on the for sale side, which saw a 9.8% drop over the same period.
The rental price increase is a factor of uncertainty in the US economic climate, which has forced a transition from a home buying mentality to one more in favor of renting.
With the growth of foreclosures in 2010, there was an increase in the number of people who lost their homes and had no choice but to rent, creating a renter surplus. Further, with the US unemployment rate over 9% throughout 2010 (up from 4% in 2006), demand for low risk housing options increased, a trend which may continue in the coming months.
At the same time, we expect to see foreclosed and long standing for sale properties re-enter the market as rentals, which should expand the rental supply, thereby helping ease rent prices. This represents an interesting contrast to the peak of the housing market in 2006, when apartment owners were converting rental units into for-sale condos.
The 2010 national rental market data is calculated from a sample of 1 million concurrently active rental prices on HotPads. These are averages of each state's monthly median rental price weighted by the number of listings in that state.
With over 500,000 active rental listings and 4 million homes for sale, HotPads.com is one of the largest national housing resources in the market today. HotPads.com is the premier map-based real estate search engine, delivering the most interactive and personal housing search experience online.