Thursday, May 07, 2009
A story this afternoon notes an increase in apartment rents now that hundreds of thousands, perhaps millions, of "homeowners" are returning to their former status as renters.
Florida is a state hit hard by foreclosures, and now apartment rents there are on the rise, according to a new report released on Thursday.This does not bode well for the inflation statistics since rental costs contribute almost one-third to the overall index. Earlier in the decade, modestly rising rental costs in combination with soaring home prices were the keys to our low-inflation, high-asset price prosperity.
There are several possible explanations, but Maya Brennan, research associate for the center, said that one seems particularly likely: "The number of foreclosures in Florida is pushing homeowners into the rental market."
Because demand has risen for apartments in the area, rents have gone up.
Rents seem to be on the rise in other parts of the country too. "Overall, it looks like rents have been on a slight increase," Brennan said.
Rising rental costs and falling home prices are not what the economists want these days.