Apartments are Getting Scarce and Rents are Rising!

It’s no secret that many underwater homeowners are losing their homes. At that point, they are renting apartments.

How big is the demand? In the 1980s, about 28 million people in the United States were living in rented apartments. By the 2010s, that number had risen to about 42 million.

It’s good news for apartment owners, who are seeing the values of their properties rise. Apartment values are also rising because the market is healthy, which makes financing cheaper.

It isn’t good news for renters. Rents are rising and vacancies are falling in some areas. For example, studio apartment rents in Chicago are increasing from an average of $720 to $765 a month.

Mainly because of foreclosures, the nation’s home-ownership rate fell by 2 percent between 2004 and 2010, according to the Census Bureau. Each 1 percent represents one million households moving into rentals.