Markets & EconomyRentals

Boost in rental construction keeping would-be buyers at bay

The rental market is benefiting from a record year of new apartment construction

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While the housing market continues to deal with the inevitable strain of low inventory, the rental market is benefiting from a record year of new apartment construction that is stabilizing rent growth and making would-be buyers think twice about transitioning into homeownership. According to RentCafé, apartment completions are expected to exceed 345,000 -- a 21 percent year-over-year increase from 2016, and the highest level of building since 1997. In key metros, the boom in construction has cooled the year-over-year rent growth rate to 1.5 percent, the lowest seen in three years. Nationally, the average rent is expected to increase 3.9 percent, 1.9 percent lower than the year-over-year increases (5.8 percent) in home prices.  San Francisco and New York City are set to benefit the most from the boost in construction, giving renters a bit of reprieve from high monthly rents. In 2016, developers built 6,200 new units in San Francisco, and another 5,400 are expected to b...