Which Cities Will See Greater Rent Growth This Year?
Digested from the Axiometrics Blog
While “moderation” is the key descriptor for rent growth in 2017, Axiometrics has identified 10 metropolitan areas—many of which were slow to recover from the Great Recession—where growth will be larger than what they experienced on average from 2010 to 2016. Tops on the list are Virginia Beach, which is forecast to have a $269 average rent increase in 2017 compared to the last six years of annual average rent. Las Vegas ($211); Washington, D.C. ($185), Bethesda, Md. ($139), Riverside, Calif. ($138), and Richmond, Va. ($131), round out the top five metro areas in this category.
Why the Fed Raised Rates for the Third Time
Since the Fed Started Raising Rates, the Economy Has Continued to Improve
The Fed lowered its target rate — the rate banks charge each other to borrow money overnight — to near zero following the financial crisis of 2008 to encourage lending and spur the economy. At the end of 2015, the Fed began raising rates in an effort to moderate the quickening economy.
Source: Federal Reserve | Note: Rate is the federal funds rate until Sept. 27, 1982, the federal funds target rate until Dec. 15, 2008, and thereafter it is the upper limit of the federal funds target rate range.
Job Growth – a Key Factor – Is Holding Steady
In recent years, the economy has added over 200,000 jobs a month on average. The Fed’s own labor market index has come back from a small dip, and the unemployment rate has fallen below 5 percent. A tightening labor market indicates that the economy is speeding up, providing another impetus for the Fed to raise rates.
Sources: Bureau of Labor Statistics; Federal Reserve
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