This week, Goldman Sachs' economists said that there is enough demand on the rental market to absorb the supply of new construction without prices slowing, echoed by new consumer price index data.
Goldman's economists explained that the “the pipeline of new [construction] projects appears to have peaked," contrary to other analysts' suggestions that years of apartment-building would slow rent price increases, MarketWatch reports. Goldman The Labor Department’s Consumer Price Index, (CPI) data show that housing costs for renters increased month-over-month, and year-over-year in March 2018. Goldman added that there has been a rise in project delays and cancellations, potentially slowing the pace of completions.
The Labor Department also reported Wednesday that average hourly earnings rose 2.7 percent for the year — continuing a years-long trend of rents rising faster than wages. Many tenants have “absorbed” rising rents because they have no other options, but hefty rent payments crowd out other spending. They also make it difficult to save for down payments.
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