gettyimages-470565842
Apartments for rent in San Francisco on April 21, 2015. Photograph by Justin Sullivan—Getty Images

Why rents could rise by 8% in 2016

Oct 07, 2015

Rental rates could rise by an average of 8% through next year, according to more than two-thirds of property managers surveyed in a report issued by Rent.com.

Out of the 500 property managers surveyed in the rental site's Property Owner and Manager Market Report—and between them, they are said to represent hundreds of thousands of rental units—88% of them have raised their rates in the last 12 months, and they seem committed to hiking rates again next year.

The reasons are manifold, but 64% of landlords surveyed identified two main factors: the twin pressures of increased demand for units and low inventory. As noted by the U.S. Census Bureau for the second quarter of this year, national vacancy rates dropped to a 20-year low of 6.8%. With the country currently in the midst of its strongest stretch of rental growth since the late 1980s, and with homeownership rates falling at historic levels, landlords have little incentive to lower their prices.

According to additional data provided to Fortune by Rent.com, the percentage of surveyed landlords willing to give concessions, such as a reduced rental price, have dropped drastically over the years:

lanlords-lowered-rent

Other real estate sites have predicted a 4% hike for rental rates next year, which represents a more modest—but still costly—increase. All together, these forecasts mean that renters are finding it increasingly more difficult to pay their rent. A recent study showed that the number of U.S. households that fork out at least half of their income on rent is set to increase by 25% to 14.8 million over the next decade.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: http://www.djindexes.com/mdsidx/html/tandc/indexestandcs.html. S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions