Rental income on residential properties shot up 12% over last year during the month of September as rents continued to rise on new demand, CoreLogic (CLGX) said in its latest December MarketPulse report.
The property analytics firm expressed a great deal of confidence on where the real estate economy for the past several months, but also noted a general sense of trepidation heading into the new year.
"Ongoing uncertainty in the overall business climate brings into question whether the economy can fire on all cylinders," wrote Anand Nallathambi, CEO and president of CoreLogic.
"The lack of a workable plan to resolve the fiscal cliff so close to deadline has impacted the confidence of business leaders," he added. "The ongoing, unresolved problems related to the European debt crisis also weigh down confidence."
But what does stand out is how well real estate has been doing for the past few months. CoreLogic researchers point out that the real estate cycle is now producing residential investment that is contributing to economic growth. Further, lenders are returning to lending, albeit slowly, and only to the most qualified borrowers in many cases.
The uptick in rental income year-over-year reflects how affordable rental properties became for investors and ongoing demand for rentals in the wake of the housing market crash.
CoreLogic expects rental demand in the residential sector to continue to rise next year with weak wage income and job growth. This in turn will create some tightness in the single-family rental market.
Analysts from the research firm note all the uncertainty blocking a full recovery can be combated with a reduction in mortgage risk, an economy driven by investments and more clarity from policymakers on housing policies.
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