(KGTV) - Rent prices across the U.S. are accelerating upwards at a very fast rate, including in the city of San Diego.
A new Zillow report shows the U.S. median rent increased 2.8 percent to $1,445 -- the fastest pace of appreciation since May 2016.
Experts at Zillow say that the increase is “likely due to people renting longer than usual, which is driving up demand and in turn, rental prices.”
With homes-for-sale inventory low, housing prices in many markets such as San Diego remain very high and “higher mortgage rates are eroding affordability” -- all leading many renters to choose to rent longer, according to Zillow’s report.
Some who decide to rent for longer periods also do so to save money for a future home down payment, Zillow reported.
For San Diego, Zillow reported:
-- median rent went up 3.9 percent to $2,548 from last year
-- median home values in San Diego increased by 10.1 percent to $581,100
-- when it comes to homes-for-sale inventory in San Diego, there are 12.5 percent fewer homes available compared to last year at the same time
According to Zillow, cities where rent is rising the fastest include: Sacramento, Riverside and Seattle.
Zillow senior economist Aaron Terrazas said, “Rental appreciation slowed between 2015 and mid-2017, but is once again picking up steam, reaccelerating over the past nine months. For-sale inventory is tight, and with home prices continuing their rapid climb, it’s becoming more and more difficult for renters to become owners, forcing them to rent longer than they otherwise would have. Searching for the ‘right’ home has become a drawn out affair and rising prices require more savings for a down payment. Were it not for strong new apartment construction over the past half-decade, rental appreciation would be even stronger than it is now.”
Home values across the country increased 7.6 percent since February 2017 to a $210,000 median price, Zillow reported. Over the past year, Las Vegas, San Jose and Seattle experienced the greatest home value growth.
Those looking to buy homes will have 10 percent fewer homes to choose from compared to last year, Zillow’s report showed.