Americans’ median monthly rent rose at its fastest clip since early 2016, leaping 2.8 percent year-over-year in February 2018, as a result of an ever-tightening housing market that has prevented some would-be buyers from owning, according to a new Zillow real estate market report released on Thursday.
Nationwide, the median monthly residential rent jumped to $1,445, the fastest rate of appreciation since May 2016. Tight markets in Atlanta and Minneapolis have caused monthly median rent in those areas to rise 4.5 percent over the past year and, in the case of Sacramento, California, a whopping 8 percent year-over-year.
“For-sale inventory is tight, and with home prices continuing their rapid climb, it’s becoming more and more difficult for renters to become owners, forcing them to rent longer than they otherwise would have,” said Aaron Terrazas, a senior economist for Zillow, in a statement. “Searching for the ‘right’ home has become a drawn-out affair and rising prices require more savings for a down payment. Were it not for strong new apartment construction over the past half-decade, rental appreciation would be even stronger than it is now.”
Meanwhile, according to the report, home values across the country rose 7.6 percent year-over-year, to a median of $210,200, further pricing out potential home buyers. San Jose in the heart of Silicon Valley in California, rose fastest, with Las Vegas and Seattle close behind.
In San Jose, home values rose more than 26 percent, to a median of $1.25 million. In Las Vegas, the median home value rose 16 percent, and in Seattle, values increased 14 percent.
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