With vacancies at near historic levels, the cost to rent an apartment rose for its fifth consecutive year in 2014. While across the nation rents increased an average of 3.6% last year, rent growth was particularly strong in small cities. In Denver, average rents were up 7.9 percent; in Charleston, S.C. they rose by 5.5 percent, and in Raleigh N.C., rents rose by 4.8 percent. Normally, national rent increases are reflected in the country’s largest cities like New York and Chicago, however these cities have seen much smaller rent increases in recent years due to plenty of new construction.
Forecasting for 2015, many economists predict only minor changes in the U.S. apartment market. Vacancy rates are expected to increase only slightly as strong. The demand will be fueled mostly by continuing renters who are unable to qualify for a mortgage or buy a home, along with emboldened new renters who are able to move out of their parent’s houses or into apartments without roommates. Demand from these two groups means rents will most likely continue to rise, albeit at a slower pace, as new supply comes online.