Falling Rents Are Holding the Housing Market Captive
A historic wave of apartment construction has kept rental prices down in much of the US, allowing would-be buyers to put off purchasing decisions.
Renting is easy.
Photographer: Brandon Bell/Getty Images North AmericaThere are many reasons for the sluggishness in housing transactions, but an underappreciated one is improved rental affordability, particularly in southern metros.
Nationally, the rental market is on the back end of a historic wave of new apartment supply, leading to elevated vacancy rates and falling rents in metros such as Austin and Nashville. For would-be home buyers faced with still-high prices, the decision to stay renting has been easy. That’s unlikely to change this spring, though a firmer rental market as supply tapers off should start to change the math around renting versus buying a year from now.