Renters Can't Escape Housing Foreclosure Crisis

USA Today (04/22/08); Armour, Stephanie
The U.S. rental housing market is booming in spite of a broader property slump, as foreclosing homeowners move into apartments, renters of foreclosed homes get evicted and existing renters stay put because of tougher lending criteria or the hope that prices will fall further. "The rental market is now very, very strong," according to Allison Atsiknoudas, CEO of Investment Instruments, which follows rental market rates. "It's stable. The increasing number of foreclosures in the market has definitely increased demand for rentals." The demand is reflected in lower rental vacancies--which had fallen to 9.6 percent in the 2007 fourth quarter from 10.2 percent four years earlier--and higher rent, which the National Association of Realtors expects to rise on average by 5.3 percent this year following a hike of 3.1 percent in 2007. Some hot markets, such as San Francisco and Seattle, are even seeing double-digit rent gains. The state of the rental market is key because the heightened demand can trigger construction of apartment buildings.