Reis, a national real estate research firm stated in a recent study that nationally apartment rents average $1,180 up from $1,125 from a year ago. In the fourth quarter, 2015 apartment rents rose 4.7% over the fourth quarter of 2014. The National Association of REALTORS® reports that the number of first time home buyers is at a 3 decade low, attributing this to the increased difficulty for first time home buyers to save for the down payment. As I’ve stated before, it is difficult for first time home buyers, who are usually renters, to pay higher rents and to save money for a down payment for a house. Although rents can’t continue to increase forever they will probably remain strong. Why? If there fewer first time buyers developers and builders will not build as many houses and this will shrink up financing options for these projects. With less housing inventory the price of these homes will increase making it even more difficult for first time home buyers to purchase a home. This in turn will keep rents high as there are fewer buying opportunities thus increasing the difficulty even more for renters to save for the down payment.
So until this scenario changes we investors in Austin area residential real estate are in a great position to reap the benefits of our investment by providing good housing for renters.
Happy New Year!
Rick Ebert / Austin Texas / 13 Jan 16