Clear Investment Group CEO Amy Rubenstein expects housing rents to continue their upward trend. She notes that apartment renting remains a more affordable option compared to buying a house currently, primarily driven by increasing construction costs. Rubenstein shared these insights on Bloomberg Businessweek Daily, discussing the overall state of the housing market.
This perspective aligns with recent market data indicating a robust rental market. According to Zillow, the typical U.S. asking rent rose to $1,962 in July, marking a 2.3% annual increase, which is the fastest pace observed in over a year. Despite this acceleration, 39.8% of rental listings on Zillow still offered concessions in July, up from 35.9% a year ago.
The demand for rentals remains strong, partly because the cost of homeownership is significantly higher. A household needs approximately $78,488 in annual income to afford the typical U.S. rental, whereas nearly $99,800 is required for a typical mortgage payment, creating a gap of over $21,000. With mortgage rates holding above 6.5%, many potential homebuyers are staying in the rental market, thus sustaining demand. Zillow forecasts multifamily rents to rise around 1.9% for the full year, and single-family rents to increase closer to 2.9%.
