Two large apartment property management firms reported increased rents in the third quarter of 2012, but the hike was smaller than any over the previous year, according to Reuters.
Equity Residential and AvalonBay Communities reported annual rental rate increases of 5.2 percent and 5.1 percent respectively, the smallest reported since the beginning of 2012.
According to Reuters, although the apartment market has enjoyed several months as the strongest part of commercial real estate, the growth of the retail housing market and the job market have combined to bring potential renters away from rentals and towards housing purchases.
Along with the growth of the housing market, the rental sector is also suffering under the pressure of the influx of newly-available units commissioned for construction during the height of the rental boom. As more and more apartments continue to enter the market, demand for each individual unit decreases and many landlords see fewer rental applications.
However, the rental market is expected to continue to see rate growth well into 2013 and 2014. When the housing market finally does return to a normal level, the rental market will likely plateau and return to pre-recession demand rates.