Rental prices rise 6.7% as Americans sour on homeownership
Prices on rental properties grew 6.7% in June as more Americans chose low-risk rentals over homeownership, a new report from housing search engine HotPads said Thursday. The agency, which compared June prices to last year, attributes the rental-price surge to pent-up demand among first-time renters and larger families who can no longer afford homeownership or who lack faith in the stability of home prices. San Francisco-based HotPads.com reached this conclusion by studying the median listing price of 500,000 rentals located in major metropolitan areas. Price hikes in the studio and five-bedroom rental segment grew the most, rising 14.3% and 12.1%, respectively. HotPads' study is in line with analyst projections that show pent-up demand for rental housing in the wake of the credit crunch. Americans who rented out properties gained $3.3 billion in total income from that endeavor during the month of May, up from $2.9 billion in April, according to the U.S. Bureau of Economic Analysis. After surveying more than 1,100 property managers in June, credit reporting agency TransUnion concluded that apartment demand is up, especially among Americans who lost homes to foreclosure. Write to: Kerri Panchuk.