US rental vacancy rate at decade low
The proportion of empty US homes for rent fell to its lowest in a decade during the second quarter, in a troubling sign for Americans whose budgets have been strained by rising rents.
The residential rental vacancy rate declined to 8.6 per cent from 8.8 per cent in the January-March period, the commerce department said on Friday. The second-quarter reading was the lowest since 2002.
The tight rental market could keep pressure on rents despite general weakness in the economy.
The average asking rent edged down to $716 a month in the second quarter, $5 cheaper than in the previous three months. Second quarter asking rents were about 5 per cent higher than a year earlier.
Five years after the housing bubble burst, the US is in the midst of a housing affordability crisis. Home prices have fallen a third from their peaks but many Americans cannot benefit because they cannot get a mortgage.
With credit tight, many have no choice but to rent. Some who can afford to buy are renting, because they see property as a bad investment. As demand has increased, rents in some cities have jumped by double-digit percentages.
Despite the tightening in the rental market, economists do not believe it is enough to ignite inflation pressures.
Stronger demand for rental apartments is seen as helping to stabilise the housing market, with builders breaking more ground on multi-family housing projects.
In a positive sign for the housing market, the home ownership rate edged up to 65.5 per cent in the second quarter, from 65.4 per cent in the previous quarter, the commerce department said.
The homeowner vacancy rate dropped to 2.1 per cent, the lowest since the first quarter of 2006, from 2.2 per cent in the first quarter.
The home ownership rate peaked at 69.4 per cent in 2004 at the height of a housing market boom fuelled by cheap credit.