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National rent growth is on the rise, according to the latest Zillow Real Estate Market Report, which says the rate of year-over-year appreciation has increased in each of the past four months.

The typical rent in the U.S. is now $1,600, an annual increase of 2.3 percent in October – just off yearly highs. Looking at month-over-month changes, however, the rate of growth has slowed in each of the past three months, but it’s likely that yearly growth will continue to accelerate through the end of the year.

Year-over-year rents grew in most of the country, falling in only two of the 35 largest metros – dropping 1.8 percent annually in Columbus and 0.6 percent annually in Houston. What’s more, the rate of appreciation has increased since a year ago in 26 of those large markets, most significantly in Las Vegas (3.1-percentage-point gain), Kansas City (2.8-percentage-point gain) and New York (2.3-percentage-point gain).

The hottest rental markets were Phoenix (up 6.4 percent  annually), Las Vegas (up 5.2 percent) and Charlotte (up 4 percent).

Inventory fell 6.3 percent annually, the biggest drop in 18 months after a short-lived recovery prior to home-shopping season. The inventory decline was sharpest in the bottom-third of the market, which is down 9.4 percent year-over-year. A lack of available inventory could be keeping more people in the rental market, increasing demand and putting pressure on rents.

“Despite some fearful headlines, the U.S. economy keeps on trucking, and that is reflected in the continued rent growth across the country. The unemployment rate remains near record lows and wage growth keeps adding to renters’ pocketbooks,” said Zillow Director of Economic Research Skylar Olsen.

Annual home-value growth in the U.S. slowed for the 10th consecutive month, down to 4.7 percent year-over-year – the lowest since February 2013. The typical home in the U.S. is now worth $231,700. Only one market is growing faster than a year ago: home values in Austin are up 7.8 percent year-over-year, compared to 6.6 percent growth in October 2018.

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