The average rent in the U.S. was $1,180 a month at the beginning of 2016, up 4.6% from a year earlier, according to a company called Reis, Inc. that tracks such trends.
Rents dipped in 2009, following the recession, but they have been growing steadily ever since.
Demand for apartments is high, since the rate of homeownership in the U.S. is about as low as it’s been at any time in the last 30 years.
Some observers believe there’s a kind of “vicious circle” at work, in that high rents make it hard for young people to save enough to buy a home, which means they continue to rent, driving up demand and thus making rental rates even higher. Right now, the percentage of home buyers who are buying their first home is the lowest in 30 years, according to the National Association of Realtors.
On the other hand, rents may level off in the future as more new apartment units are built, increasing the supply. According to Reis, last year some 188,000 new apartment units came on the market – the most in one year since 1999.