Rising rents, small spaces and no places … Oh my!
These are just a few of the issues renters are facing in 2014. After a year of significant growth in the housing market, renters are now left with several challenges due to limited housing.
In 2013, the demand for apartment rentals skyrocketed, while not much inventory was available. According to a report by Reis Inc., apartment vacancy levels reached their all-time low of the past decade in the fourth quarter of 2014. For renters, that means finding a new place to call home could be difficult and very competitive. Reis reported that the last time vacancy levels were so low was in 2001, when the rating reached 3.9 percent. In the fourth quarter of 2013, the national vacancy rate was only 4.1 percent. Vacancy levels peaked in 2009, when the rate reached 8 percent.
While most of the major U.S. cities had extremely low vacancy levels, not every area experienced the same decline. Smaller cities appeared to be doing better, with more rentals available and cheaper rents. With so much demand for housing, new construction is set to see a big increase in 2014. Developers hoping to cash in on the high demand are racing to build new apartments in the most popular cities. In the fourth quarter of 2013, nearly 42,000 rental units were completed, according to Reis. The new construction may help ease the tight inventory for renters.
With fewer apartments available, rent prices have also risen over the last year. According to Reis, in the fourth quarter alone, rents rose 0.8 percent nationwide. In the second quarter of 2013, rents rose by about 1 percent, well above the 0.6 percent increase in 2012. Trulia, a company that measures real estate data, found that apartment rents increase at an average of 3.9 percent annually, a substantial rise year to year. The top five most expensive cities in the U.S. for rental markets included New York City, Miami, Los Angeles, San Francisco and Boston.
While U.S. rent prices can vary greatly from city to city, renters insurance doesn't fluctuate the same way. Getting coverage is a smart move for all renters that could end up saving hundreds or thousands of dollars in the long run. If something were to happen your belongings from fire, theft or weather damage, renters insurance can help you cover the losses.