The Austin Apartment Association is reporting an increase in rents of 4.6% in the past year. Demand has risen and supply has decreased, leading to a steady rise in prices. Apartment occupancy is roughly 93.2% and rising, according to a story from KXAN today. Move-in specials and other incentives are disappearing quickly and the ability to negotiate your lease price or terms no longer exists.
Mark Sprague, Director of Business Development at Mission Mortgage, has been pointing to this trend for months. As early as last September, Sprague sounded the alarms on rental availability and the subsequent price increases we would see. Sure enough, occupancies and rents have risen in that time and will continue upward for the time being.
One of the downfalls of renting is that your rent can increase everytime your lease expires and you sign a new one. Some renters this cycle have seen the rents rise $50, $200, even $400 or more per month. The demand allows them to do so without fear of sitting on an empty residence.
Some renters are considering buying and we encourage anyone who is facing a rent increase to speak with a licensed mortgage professional to see what your options are for purchasing, rather than signing a new lease. It may turn out that buying is not right for you at this time. If so, you will be given the knowledge of how to prepare yourself for the requirements of homeownership. If you are able to purchase, the time to do so is right. Not only are rents and rental occupancies rising, but interest rates for mortgage loans are still hovering near historic low levels. But interest rates are likely to rise in the future and home prices in Austin will most likely avoid any further decreases. All signs point to looking at purchasing real estate.