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Demand for rental homes remains strong in the Phoenix area.
Monthly rents are up and the supply of rental homes is down across metro Phoenix, according to Arizona State University economist and housing expert Michael Orr.
Orr, director of ASU’s Center for Real Estate Theory and Practice, said the average monthly rent for a single-family home is $1,548 up from $1,418 a year ago.
That’s a 9 percent increase.
Orr said there are very few lower rent homes on the market right now.The inventory of rental homes is also down from last year. Orr said there were more than 3,200 rental homes available in the local market in July. That compares to more than 4,200 a year earlier.
That is down 30 percent.
“Rental demand remains quite strong and supply is very constrained for properties below $1,300 a month,” Orr said.For the year, rents for homes were up 6.2 percent while apartments are up 10.9 percent. That translates into a 7 percent rise in rents across the market. Orr said continued demand for rental homes has landlords keeping those properties up for lease rather than put them for sale to home buyers.
“They keep raking in the money,” Orr said.
The ASU economist said that is contributing to fewer entry level homes on the market creating bidding wars from buyers.
High demand for single-family rentals also comes as the Joint Legislative Budget Council reports a decline new construction permits for apartments.