Us rental growth outpaces house prices

Rents in the US are now rising faster than hosue prices, as a shortage of supply puts tenants in a squeeze. Rents have risen 4.3 per cent year-on-year in June 2015 to a median of $1,369 per month, with rental growth in Q2 2015 outpacing house price growth in just under half of the country's 35 largest metro areas.

Nationwide, rental growth surged past a 4 percent annual pace in June, up 4.3 percent to a median U.S. rent of $1,369 per month. In Q2, rent growth outpaced home values growth in just under half of the nation’s 35 largest metro areas.

As rents rise, tenants are increasingly aiming to climb the property ladder. According to Zillow, 5.2 million of them would like to make the leap from the rental rungs to the sales steps. But the shortage of inventory is proving a big obstacle, whether they choose to stay put or try to buy a place of their own: supply of for-sale homes slipped 6.5 per cent annually in Q2 2015, with 19 of the 35 largets metros seeing declines. As a result, renters are finding themselves trapped in tenanted accommodation, further fuelling the increase in rents.

Indeed, rates rose the most in markets also seeing house prices climb, thanks to the imbalance between house-hunters and sellers. San Francisco saw rents rise 14.5 per cent in Q2 2015, ahead of Denver (13 per cent), San Jose (12.5 per cent) and Portland (10.8 per cent).