The Little Rock metropolitan area had the 15th highest increase in single family home rental rates in the country in the second quarter, according to a firm that tracks the housing industry.
Rents in the Little Rock area -- including Pulaski, Saline, Faulkner, Lonoke, Perry and Grant counties -- were up 11.6 percent in the second quarter, according to RentRange Data Services.
RentRange calculated the rankings by comparing rental rates for single family three-bedroom homes. The company is owned by publicly traded Altisource Portfolio Solutions of Luxembourg.
Steve Pinter, owner of Steve Pinter Realty and single family investment properties in Pulaski, Saline and Garland counties, said he has not noticed rents increasing by almost 12 percent in central Arkansas.
"It seems like rates have kind of leveled," said Pinter, who has owned his own real estate firm and rented single family homes for 38 years. "It really depends on the area. I have some [rents] I've been able to raise and I have some I've had to keep the same."
Rents are higher in Saline County, Pinter said.
The Little Rock economy is humming along, said Dennis Cisterna, chief revenue officer of Investability Real Estate Inc., which is also owned by Altisource.
"There is strong employment growth and a low unemployment rate," Cisterna said. "Obviously, [Little Rock is] having appreciation in home prices and rents, which shows the demand in that market."
Nationally, the median single family rental rate increased 8.8 percent in July compared with July last year, Cisterna said. The median rate means half the rents were higher and half were lower.
"That runs relatively consistently with home price appreciation in most of these markets," Cisterna said. "But it's not growing nearly at the rate as a place like [Little Rock] is, though."
Florida metropolitan areas dominate the top five areas with increases in single family home rental rates. RentRange does not list average rent prices.
The Fort Myers-Cape Coral area was No. 1 with a 26.1 percent increase in rental rates in the second quarter, compared with the second quarter last year.
The New Orleans metropolitan area was second with a rental increase of 20.6 percent and the Seattle-Tacoma, Wash., metropolitan area was third with an increase of 16.6 percent.
The Daytona Beach-Ormond Beach, Fla., area was fourth with a 15.7 percent increase in single family rental rates and Port St. Lucie, Fla., was fifth with a 15.2 percent increase.
Five metropolitan areas on the top 25 list are in Florida and five are in California.
Rising home values in Florida and California are creating hurdles for potential buyers, which is continuing to drive a growing single-family rental market featuring strong rent increases and low vacancy rates, RentRange said.
There are various reasons why clients rent a home instead of buying, Pinter said.
"Normally, it's because they can't qualify to buy a home," Pinter said. "Their credit score is too low or they don't have the down payment. Many of them can barely scrape up the deposit and the first month's rent."
Some in the younger generation choose to rent because they don't want to make a commitment, Pinter said.
"They don't want to commit to buying a house, they don't want to worry about maintenance, they don't want to commit to relationships," Pinter said. "They just want to enjoy life and they don't want to plan too far ahead."
Business on 09/14/2016