ARIZONA NEWS

Booming rental income in Phoenix expected to slow

Sep 15, 2015, 7:37 AM

(AP Photo/Mel Evans)...

(AP Photo/Mel Evans)

(AP Photo/Mel Evans)

What goes up, must eventually level off, so say those keeping a close watch on the rental market in Phoenix and other parts of the country.

It’s a good time to be an investor in rental property with surging costs and low vacancy rates. But with the supply of apartments rising, and renters looking to buy as the economy improves, investors shouldn’t expect those soaring rental incomes to continue for much longer.

Tina Tamboer of “The Cromford Report” told KTAR’s That Real Estate Show the high cost of rent is forcing renters to take a closer look at putting money into property they can call their own.

“If you’re actually trying to control your monthly income, renting is probably not the best idea for you,” she said. “If you’re able to qualify, if you really want to fix your monthly expenses, get a 30-year fixed mortgage rate.”

Tamboer added the increase in average rent per month per square foot across the greater Phoenix area has accelerated more over the past two years than it did between 2000-2013.

“Rent is now the one thing in the American economy that is rising faster than anything else,” she said.

Published as a contributor for Forbes, Lawrence Yun, the chief economist of the National Association of Realtors, offered a number of reasons for why we should expect a tapering off of soaring rental income.

Yun pointed out that construction activity on apartments is already above the historical norm and that steady job growth, along with falling debt levels (outside of student loans) should help renters improve their credit scores and put them in a better position to buy homes.

Yun also made note of so-called boomerang buyers re-entering the housing market after foreclosures and short sales forced many into rentals during the housing crisis.

He emphasized that while there may still be room for rental income growth for another year or two, we should also expect a slowdown in rental housing and rental income in the not-too-distant future.

Join Realtor Diane Brennan for That Real Estate Show Sundays at 8 a.m. on KTAR News 92.3 FM.

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

The Maricopa County Board of Supervisors unanimously voted to wipe out all unfunded pension debt fo...

KTAR.com

Maricopa County votes to wipe out unfunded pension debt for retiring law enforcement

The Maricopa County Board of Supervisors unanimously voted last week to wipe out all unfunded pension debt for retiring law enforcement employees.

4 hours ago

A woman was rescued 36 hours after her car crashed about 200 feet down an embankment in Arizona. (P...

KTAR.com

Woman rescued 36 hours after car crashes 200 feet down embankment in Arizona

A woman was rescued 36 hours after her car crashed about 200 feet down an embankment in Arizona, authorities said Monday.

8 hours ago

Smoke billowed over north Phoenix after an abandoned restaurant caught fire in north Phoenix on Jun...

KTAR.com

Abandoned restaurant catches fire, billows smoke over north Phoenix

Smoke billowed over north Phoenix after an abandoned restaurant caught fire in north Phoenix on Monday afternoon, authorities said.

9 hours ago

pool party in the Valley Arizona liability homeowner...

Serena O'Sullivan

Homeowners can be held liable for drownings, injuries in their pools, Phoenix attorney says

Want to host a pool party in the Valley this summer? You can be held liable if someone injures themselves or drowns in your pool.

10 hours ago

Herman Campbell is the subject of a Silver Alert issued June 17, 2024, in Phoenix....

KTAR.com

Silver Alert issued for Phoenix man with medical condition who went missing over weekend

Authorities have issued a Silver Alert for a 65-year-old Phoenix man with a medical condition who went missing.

11 hours ago

Leaving a child in a hot car lands Mesa woman in jail, police say...

Serena O'Sullivan

Mesa woman left her child in car that measured 129 degrees, police say

Nichole Yazzie, a 32-year-old Mesa mother, was accused by authorities of leaving a child in a hot car during an excessive heat warning.

11 hours ago

Sponsored Articles

...

Collins Comfort Masters

Here’s how to be worry-free when your A/C goes out in the middle of summer

PHOENIX -- As Arizona approaches another hot summer, Phoenix residents are likely to spend more time indoors.

...

Day & Night Air Conditioning, Heating and Plumbing

Beat the heat, ensure your AC unit is summer-ready

With temperatures starting to rise across the Valley, now is a great time to be sure your AC unit is ready to withstand the sweltering summer heat.

...

COLLINS COMFORT MASTERS

Here are 5 things Arizona residents need to know about their HVAC system

It's warming back up in the Valley, which means it's time to think about your air conditioning system's preparedness for summer.

Booming rental income in Phoenix expected to slow