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Rents Continue to Rise While Housing Market Cools Down

U.S. home rents jumped 4.2 percent in July from a year earlier while house prices showed signs of flagging.
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WASHINGTON -- U.S. home rents jumped in July while house prices showed signs of flagging.

Real estate data firm Zillow said Tuesday that rents rose a seasonally adjusted 4.2 percent from a year ago.

The higher rents suggest that demand for apartments is continuing to grow as the share of Americans owning homes has dropped. The share of the U.S. population who own homes has fallen to 63.4 percent, a 48-year low, according to the Census Bureau.

Several metro areas showed a split in the rental and ownership markets in July. On a month-to-month basis, rents increased in Baltimore, Boston, Minneapolis, Phoenix and Washington, D.C. By contrast, home values in those markets declined.

The trend is most pronounced around Washington, where home values slipped on an annual as well as on a monthly basis. Over the past 12 months, the median home price in Washington fell 0.7 percent to $356,500. At the same time, home rents in Washington rose 1.54 percent.

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Similarly, the median home price in nearby Baltimore tumbled 0.6 percent while rents in that city increased 2.36 percent during the past year.

Still, many metro areas with substantial job growth continue to show both rising home values and rents. Rental prices have leapt more than 14 percent in San Francisco, 12 .6 percent in Denver and 11.2 percent in Portland, Oregon.

Prices are also rising around cities with seemingly tight availability. Rental costs are up almost 8 percent in Buffalo, New York, 8.6 percent in Knoxville, Tennessee, and 11.5 percent in Springfield, Massachusetts.