Arlington in Top 10 for Steepest Rent Increases

Many buyers find the price of homes in Arlington on the high side. Unfortunately, renting can be even more expensive. In a new ranking, Arlington ranked as one of the top 10 cities with steepest rent increases last year.

In many parts of the country, the real estate sales are sluggish, but one housing sector that’s not slowing, however, is rentals. The rental market is booming.

The Wall Street Journal reports the average apartment vacancy rate is 6.6% nationwide, down from 8.0% last year. In addition, the number of occupied apartments rose by more during Q4 2010 than during any comparable period of the last 10 years.

It’s a major reason why rents are up 2.3%.

Some areas fared worse than others. MSNBC's study of rent increases, for example, lists the 10 U.S. cities in which rents increased the most last year. And they may not be the cities you’d expect.

In order:

   1. Greenville, SC (+11.2%; $669 average monthly rent)
   2. Chattanooga, TN (+10.4%; $726 average monthly rent)
   3. Savannah, GA (+8.4%; $866 average monthly rent)
   4. Portland, OR (+8.1%; $875 average monthly rent)
   5. San Jose, CA (+8.0%; $1,716 average monthly rent)
   6. Nashville, TN (+8.0%; $786 average monthly rent)
   7. Tacoma, WA (+8.0%; $900 average monthly rent)
   8. Denver, CO (+7.5%; $873 average monthly rent)
   9. Washington, DC/Arlington, VA (+7.4%; $1,473 average monthly rent)
  10. Raleigh, NC (+7.4%; $785 average monthly rent)

Big cities New York (#18), San Francisco (#19), and Chicago (#24) showed modest gains, by comparison.

Not everyone wants to be a homeowner, but renters are facing a squeeze. With mortgage rates historically low and home values slow to recover, in many cities, the cost-benefit analysis is shifting toward buying. See my previous article on .

There are several new apartment projects in the works, but those are still 2 years away from completion. The DC area continues to add more jobs and workers continue to relocate to this area so expect the rental market to remain tight for the next several years.