In particular, Seattle experienced a large rent increase this past year despite a projection that 12,000 rental units will be added to the market by the end of the year. Portland, which also experienced an impressive increase in average annual rents, did so even as 4,000 units were added in the city. In fact, Portland saw its occupancy rate jump a full percent this past year. San Francisco, which has also added thousands of units recently, saw an occupancy rate increase of 1.2%.
"So far, it appears aggressive rent hikes and new construction hasn't had a negative impact on occupancy rates," according to the RealFacts report.
Though there seems to be no signs of rent increases slowing down, the report warned that the market will soon become oversupplied: The increased availability of new rentals, coupled with the rise in interest rates, will eventually lead to a downturn in the rental market.
Additionally, more people will turn to buying as an affordable alternative. That's because even though home prices rose 7% in the last year, outpacing rent increases, the gap between buying and renting is still quite large.