Apartment rents are still surging but some relief is in sight.
Average U.S. rent rose 0.4% in May, matching the record high, according to consumer price index data released this month, the 67th consecutive month of increases.
Rent climbed about 5% in the first half of the year, well above the 3% historical average, saysGreg Willett, chief economist at RealPage, a property management software provider. Renting an average market-priced apartment now costs $1,282 a month.
Builders have responded, churning out 75,000 new multifamily units last quarter, but that wasn’t enough to keep up with demand, Willett says.
Still, about 511,000 rental units are under construction in the 100 largest markets, with 315,000 units slated to be completed this year. That’s up from 230,000 new apartments in 2015.
The fresh supply, Willett says, should allow rent inflation to stabilize at 3.5% to 4% in the second half of 2016 and over the next few years.