Rental Prices Rising as Interest Rates Remain Low

Share Article

CF Funding informs readers the the current environment of rising rental prices and low mortgage rates will lead to a boost in housing activity in the years to come.

News Image
rental rates to an average $1,136.88 in April, which is 3.4 percent higher than in April 2013

As the weather improves and Spring homebuying season is upon us, many renters are also shopping for new apartments. Unfortunately, rental prices are rising at the fastest pace since the recession, according to the apartment market research company Axiometrics Inc. At the same time, interest rates on a home mortgage are expected to stay low for years, as Federal Reserve Bank of New York President William Dudley shared in a speech on May 20th. CF Funding predicts these factors will combine to form a boost in housing activity in the coming years.

As the economy has improved and demand for apartments has risen, landlords were able to raise rental rates to an average $1,136.88 in April, which is 3.4 percent higher than in April 2013. Rental prices have seen the biggest spike this year since the recession ended in 2009. In a blog post from April 30th, Stephanie McCleskey of Axiometrics Inc, shared on April 30th that “in Atlanta… only 9% of renters can afford apartments build in the past two years, compared with 22% of renters for units built in the previous cycle,” according to the research company’s affordability scale, which assumes 100 percent of residents can afford the least expensive apartment’s rent per unit.

In an updated blog post, the research company shared today that the apartment market is still strong, however “we still predict that the rate of effective rent growth and occupancy will moderate by the end of the year,” said KC Sanjay.

CF Funding is happy to share that buying a home is still affordable, as interest rates are still near 2014 lows and are expected to stay low. CNN Money shared on May 20th that there are three major reasons why the Fed may keep interest rates “below historic averages for the long haul,” based on William Dudley’s speech today. Dudley indicated that the economy is still too weak to raise interest rates, as the Great Recession “scarred households and businesses” and the housing industry faces “several significant headwinds.” Dudley emphasized the issues of mortgage credit availability for those with low credit scores, student loan debt burdens, and housing supply. Dudley also shared that as a large portion of Americans are retiring, the potential for economic growth is smaller than it was in the 1990s.

On a positive note, Dudley expects the federal rate to stay “well below” rates seen in a booming economy, which were as high as 4.25%. CF Funding will keep readers updated as interest rates may change throughout the year on their website at Renters who are considering buying a home may contact the lender at 630-328-8900.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Giorgio U Ferrero
CF Funding
+1 (847) 338-6062
Email >
Visit website