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Rents continued to raise nationwide in January

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Staff writer |
Rents
Housing   The rent problem is far from over

Median rents continued rising nationwide in January, with rental appreciation in some small and even struggling housing markets catching up to the country's hottest areas, according to Zillow's January Real Estate Market Reports.

In Kansas City, for example the Zillow Rent Index (ZRI) grew 8.5 percent year-over-year in January, more than twice the national pace and faster than markets where rapidly growing rents are an old story, including Seattle, Boston and Los Angeles.

Two years ago, when West Coast rents were already soaring, rental growth in St. Louis was flat and even falling. But between January 2014 and January 2015, rents there rose 4.2 percent. The fastest growing rent in the country in January 2015 was in San Francisco, where median rent was up 15 percent year-over-year for the fourth month in a row.

U.S. rents were up 3.3 percent year-over-year in January, near the historical norm. The fastest growing rental markets in January included Denver, Colo., Kansas City, Nashville, Tenn., Portland, Ore., and Charlotte, N.C.

Nationally, the Zillow Rent Index rose 3.3 percent year-over-year in January, and 0.4 percent from December, to a median of $1,350. For years, demand for rentals has driven up rents, and income has not kept pace.

Currently, Americans should expect to spend roughly 30 percent of their incomes on rentiii as opposed to historic norms of around 25 percent.

And the problem is far from over, according to more than 100 housing experts surveyed in the latest Zillow Home Price Expectations Surveyiv. More than half said they expected rental affordability to continue to be a problem for at least two more years.

Nationally, home value growth continued to level off in January. The U.S. Zillow Home Value Indexv rose 0.2 percent from December and 5.4 percent year-over-year, to a median value of $178,500.

Home values are expected to grow another 1.9 percent through January 2016, according to the Zillow Home Value Forecastvi. By the end of the year, Zillow expects growth in rents to outpace growth in home values.


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