Mortgage bankers shed 1,200 jobs, as their refinance business has dropped dramatically due to higher rates. The unemployment rate for young adults rose to 7.8 percent, with just 74.8 percent of them working, according to the Bureau of Labor Statistics. That is the lowest share in a year.

(Read more: Jobs growth misses high hopes; rate drops to 7.3% )

“Without jobs, fewer young adults will buy, rent, or even move out of their parents’ homes, which holds back future household formation and longer-term demand for new construction,” noted Jed Kolko, chief economist for Trulia.

On the other hand, large downward revisions in overall jobs in July kept mortgage rates from rising even further. Conforming loan rates are tied to mortgage-backed-securities, or MBS, which tend to correlate with U.S. Treasuries.

Conforming loans are those backed by Fannie Mae, Freddie Mac or other government agencies. Their limit is $417,000 but can be as high as $625,500 in high-cost housing markets.

Article source: http://www.cnbc.com/id/101014193

Buying ain’t easy. First prices soar, then they slow down, but rising interest rates make up the difference.

Blanca Torres
Reporter- San Francisco Business Times

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The rapid rise of home prices may be slowing, but too bad interest rates are now creeping up.

In the Bay Area, home prices are still growing, but not as fast, according to Trulia, the San Francisco-based online real estate marketplace.

The firm found that while home prices jumped 17.2 percent in the month of July compared with July 2012, price growth slowed down during the last six months. From January to March, prices rose by 6.5 percent and from April to June, they went up 3 percent.

“The biggest price slowdowns have come to some of the hottest local markets,” said Jed Kolko, Trulia’s chief economist. “California and Nevada remain the Wild West for asking home prices, with some of the sharpest drops during the bust, strongest rebounds over the past year, and now biggest slowdowns in the past quarter.”

Nationwide, asking home prices dropped slightly— 0.3 percent — in July compared with the previous month. It’s the first time since November 2012 that prices didn’t go up.

They are still up 11 percent for the month of July compared with the same month last year.

One major factor deflating home prices is rising interest rates during the past six months.

In the past couple of years, historically low interest rates boosted sales and skyrocketing price growth, but higher rates are now dampening the mood.

“Asking home prices are now starting to lose steam as mortgage rates rise, inventory expands and investor demand declines,” said Trulia in a recent market report.

A year ago, a buyer could afford to pay a higher asking price because interest rates were low. Now, buyers may end up paying the same per month, but more of their payment will go toward interest versus the principal value on the loan.

So even if prices level off or go down in the months to come, buying a home in the Bay Area will still be just as costly if not more.

Blanca Torres covers East Bay real estate for the San Francisco Business Times.

Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2013/08/bay-area-home-price-growth-leveling-off.html

In its monthly report on housing prices, the SP/Case-Shiller Home Price Index — considered to be the leading measure of home prices across the country — said Tuesday the average selling price for a home in the San Francisco area jumped 23.9 percent over a 12-month period ending in April.

Jed Kolko, Trulia’s chief economist, told SFBay home prices in the East Bay showed even more dramatic increases:

“Trulia’s Price Monitor, which is a forward-looking indicator of price trends based on asking prices and reports the San Francisco and Oakland areas separately, showed prices up 31 percent in the East Bay year-over-year, the biggest increase among the 100 largest metros in the country.”

Kolko said home prices in other Bay Area counties also increased, but not as much as the East Bay:

“Prices in our San Francisco metro area, which includes San Mateo and Marin counties, were up 20 percent year-over-year, which is also a very steep increase but not as steep at the East Bay gain.”

Though the housing market is rebounding in most cities, a tight inventory of homes across the Bay Area and one of the fastest job growth rates in the nation is helping to boost home prices locally.

And as Kolko points out, home prices in the East Bay saw prices fall sharply during the bust, creating bargains for home buyers.

SP/Case-Shiller says nationwide prices the average price for a home during that same period of time ending in April jumped 12.1 percent — setting a monthly record.

David Blitzer, chairman of the index committee at SP Dow Jones Indices said the housing recovery is looking strong:

“Atlanta, Las Vegas, Phoenix and San Francisco posted year-over-year gains of over 20 percent in April. San Francisco was the highest at 23.9 percent. … Recent economic data on home sales and inventories confirm the housing recovery’s strength.”

Behind San Francisco in showing strong growth was Las Vegas, which saw prices climb  22.3 percent and Phoenix, which saw prices rise by 21.5 percent.

Article source: http://sfbay.ca/2013/06/25/housing-boom-sends-bay-area-home-prices-soaring/

So few homes are listed for sale that agents are resurrecting old ways of drumming up business – going door to door, leaving cards and flyers and writing personal letters, asking owners if they’re interested in selling. Social networking and e-mail blasts are being used to increase inventory as well.

“People are going old-school, farming their territory,” said Lynda DiVito, an agent with Redfin in the East Bay, using real estate agent slang for canvassing neighborhoods.

While tight inventory is a national trend, it’s especially pronounced in the Bay Area.

Alameda County, for instance, had 949 homes for sale in February, down 64 percent from the 2,617 on the market at the same time last year, according to data from Realtor.com, the listings website of the National Association of Realtors. Contra Costa County had 899, down 58 percent from 2,152 in February 2012.

“Those are striking reductions in inventory,” said Errol Samuelson, president of Realtor.com.

While inventory numbers did tick up slightly from January to February, that was a normal seasonal change, not an indication of the logjam loosening.

“After seasonal adjustments, inventory is still falling; the underlying trend is still downward,” said Jed Kolko, chief economist with real estate site Trulia.com.

However, he thinks the rate of decline is slowing.

“Inventory tends to fall the most sharply after prices bottom, as no one wants to sell at the bottom, they just want to buy,” he said. Trulia shows that Bay Area prices bottomed more than a year ago.

Price a factor

Sellers remain reluctant and elusive for several reasons. Those who are still underwater – owing more than their house is worth – have the obvious impediment of not wanting to do a short sale.

But many others “feel underwater based on the price they paid,” Samuelson said. That is, someone who paid $700,000 for a home in 2007 won’t feel good about selling it for $625,000 right now, even though the sale would cover their remaining mortgage.

Some potential sellers, seeing prices surge, are hoping to hold out for more. Others who might want to move up to a bigger house fear that the market frenzy means they won’t be able to find or afford anything else.

Now that it’s spring, the busiest real estate season, more homes should start hitting the market. But many agents have been taking matters into their own hands, making pitches directly to potential sellers about why it’s time to get off the fence.

Although there are numerous online sites to track homes for sale, “the way the market is set up now is forcing us to go back to the beginning where (agents) walk up to a door and knock and say, ‘Hi, how are you, my name is … ‘ ” said Adelaida Mejia, a Realtor with Vanguard Property in San Francisco.

Personal touch

She recently worked with a client seeking a home in San Francisco’s Clarendon Heights neighborhood, above Cole Valley. After losing out with bids, she walked the neighborhood with him and identified houses he particularly liked. Mejia looked up the homeowners and wrote personal letters to each, explaining that her client loved the area and was seeking a house there.

“Three weeks later, one person called me back and said ‘We loved your letter, we’d love to talk even though we’re not on the market, come on over,’ ” she said.

Rich and Renee Gimigliano, the homeowners, said they received two or three agent solicitations a week after unsuccessfully trying to sell the house last year, but ignored them because they were form letters.

“Adelaida’s note was different; more personalized,” Rich Gimigliano said. “We were planning to put the house on the market again, but the note just pre-empted that.”

Her client ended up visiting the house, making an all-cash offer and buying it. “It was a really stress-free experience for both” the buyer and seller, she said.

Beating the bushes for sellers is an about-face from just 18 months ago, when the challenge was to find people who wanted to buy.

A corresponding trend is that homes are selling very quickly.

‘Unbelievable’

“The median days on market in Contra Costa is 13 days – that’s unbelievable,” Samuelson said. A year ago it was 33 days.

Redfin has identified another trend it calls “flash sales” – homes that sell within 24 hours of being listed, usually because a buyer swoops in with an offer too good to refuse. Often, those are buyers who have lost other bidding wars and are determined to land a property.

In the past six months, almost 1,000 Bay Area properties went under contract within one day, Redfin said.

“I just had that experience at a house in the Oakland hills,” DiVito said. “I held the brokers’ tour just before putting it on the market. A buyer and agent walked in and offered us our list price in cash on the spot.”

Underscoring how much the market has changed, she said her sellers had tried to sell the house a year ago “and could not move this property, even though they lowered the price three times.”

Same-day offer

The sellers, who were buying a new home and needed to sell quickly, were happy to take the same-day offer since a cash deal meant it couldn’t be derailed by problems with financing or appraisals.

“Flash-sale terms tend to be really good because (buyers) really want to lock down that property quickly,” DiVito said. “They’re more willing to meet the sellers’ needs to scoop it up before anyone else gets it.”

What happens next with inventory is a big question hanging over the real estate recovery.

“My best guess is that you’ll see an orderly return of inventory to the market,” Samuelson said. “I don’t expect that you’ll see the floodgates open and torrents of properties hit the market. But for each percentage point increase in price, there will be some people who for life reasons have wanted to sell for the past five years – their kids moved out, they got divorced – and now feel that the time is right and they have enough equity.”

Tight inventory, fast sales

The number of homes for sale in the six largest Bay Area counties has dropped dramatically compared with a year ago, according to data from the Multiple Listing Service. Correspondingly, the time the homes stay on the market has also dropped.

Source: Realtor.com

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid

Article source: http://www.sfgate.com/realestate/article/Homes-sell-faster-than-ever-in-Bay-Area-4375058.php

Mansions that had languished on San Francisco’s Billionaire’s Row were finally snapped up last year. Well-known moguls from tech and finance poured money into real estate. Expansive estates in Silicon Valley drew publicity-shy billionaires who set up shell companies to shroud their identities.

In the nine-county Bay Area, 11,041 properties changed hands in 2012 with sales prices above $1 million, up 29 percent from 2011, according to real estate service DataQuick of San Diego.

Of course, around here, a million dollars doesn’t necessarily buy a mansion. That price tag can easily adorn a two-bedroom condo in San Francisco, a run-down ranch in Palo Alto, or a suburban tract house in Moraga.

“Virtually all home sales in some communities were in the $1 million-plus category,” DataQuick said, listing Ross, Los Altos, Atherton and Hillsborough as Bay Area towns where that was the case. Hillsborough had 422 million-dollar-plus sales in 2012.

Overseas cash

The real action was at the even higher end – 162 Bay Area homes sold for north of $5 million, DataQuick said. California notched an all-time high of 697 homes selling for over $5 million.

“In the prestige market (some sales) may have to do with where to park assets relative to other areas like the stock market and mutual funds,” said DataQuick analyst John Karevoll.

“One clear portion of the market that’s very active is buyers from abroad,” he said. “They’re coming here, they’ve got money and that money is in cash.”

The recovering economy, especially the tech sector, definitely has played a role in the luxury boom.

“The technology industry has done very well recently, which has created a wealthier pool of buyers,” said Jed Kolko, chief economist with real-estate site Trulia.com. “At the same time, with prices rising, there are more million-dollar homes than a year ago simply because of appreciation.”

Inventory of high-end homes is just as tight as at other price points.

Malin Giddings, a Coldwell Banker agent who focuses on luxury real estate, said: “2012 was an incredible year because there was very low inventory and very high demand.”

Just as with the regular market, high-end homes sold for less than their bubble-fueled heights. “For sellers who understand that values have taken a 25 percent hit, those properties are moving,” she said. “We are not back to pre-2008 prices.”

Who’s buying

Another impetus for sellers: A Jan. 1 hike in the capital gains tax.

“In Palo Alto there were quite a few sales of homes over $3 million by people whose cost basis was $50,000 to $200,000, who were motivated to close before the end of the year because of the tax bump,” said Steve Niethammer, a Realtor with Zane MacGregor Co.

Who buys trophy homes?

David Bellings of Coldwell Banker, who specializes in luxury properties, said his current listing for an $18.5 million, seven-bedroom home in Sea Cliff, as well as other high-end homes he sold last year, drew interest from “CEOs from around the world” as well as “celebrity types from L.A. thinking of moving here to escape the crazy paparazzi and to have more of a normal life.”

Several well-known tech moguls went on shopping sprees in San Francisco. Yammer founder David Sacks bought 2845 Broadway for $20 million, a fraction of the $65 million it once commanded. Jack Dorsey of Twitter and Square paid $9.9 million for a two-bedroom in Sea Cliff. Zynga’s Mark Pincus paid $16 million for the Newhall mansion on Pacific Avenue. Apple’s Jonathan Ive, the mastermind behind the design of the iPod and iPhone, paid $17 million for 2808 Broadway.

“Many of those properties had been on the market for over three years, especially on Billionaire’s Row,” said Sally Kuchar, San Francisco editor of the real-estate website Curbed.com. “The influx of tech money has really helped those big estates sell.”

Tech money reportedly fueled the blockbuster sale of a 9-acre hilltop estate in Woodside that sold in November for $117.5 million, setting an all-time U.S. record. Although public records don’t show who ponied up that amount, the Los Angeles Times said the new owner may be Softbank CEO Masayoshi Son, the second-richest man in Japan.

The seller is no secret: It was Tully Friedman, CEO of San Francisco private equity firm Friedman, Fleischer and Lowe.

Record-setting sums

“That sale just blows my mind,” Niethammer said. “It looks like (the buyer) overpaid by $100 million. Property in Woodside generally goes for about a million bucks an acre; with the house, it should have been about a $20 million deal.”

The previous record-setting sale quickly ended up losing half its value, at least for tax purposes. Russian billionaire Yuri Milner, an early Facebook investor, paid $100 million in 2011 for a Los Altos Hills mansion, but a year later got the county to chop its assessed value to $50 million.

Niethammer is listing a 150-acre former llama ranch estate for $15.5 million in Bonny Doon, overlooking the Pacific Ocean. “I told the seller, ‘You might want to add $100 million to it so it will sell,’ ” he joked.

The historic Flood estate in Woodside, 92 oak-studded acres listed for $85 million in September, has drawn a lot of interest, said Mary Gullixson of Alain Pinel Realtors.

Showing just how coveted open space is, she’s listing a 3-acre parcel – no house – in the Menlo Circus Club area of Atherton for $19.8 million. “It’s a diamond in the rough,” she said.

Another mega-estate in Silicon Valley just hit the market for a cool $100 million with an unusual caveat – the buyer must agree to let the current owner live out his days there.

Located in Hillsborough, the 47.4-acre estate features hiking trails, streams, wildlife and gardens designed by Thomas Church. It comes with a 16,000-square-foot Mediterranean-style home designed by the same firm that designed the St. Francis Hotel. The house has a ballroom, pavilion, library and swimming pool, according to court records of the owner’s divorce.

Lifetime resident

The house’s inhabitant – Christian de Guigne IV, 75, the current owner – plans to remain in residence there for the rest of his life.

Isn’t that a rare request? “It’s as unusual as the size of the land that’s available in such an exclusive area,” said listing agent Gregg Lynn of Sotheby’s International Realty.

The de Guigne family – the patriarch emigrated from France and co-founded Stauffer Chemical Co. in Gold Rush-era San Francisco – has owned the land for 150 years. The house construction started in 1914 and was delayed when Christian de Guigne II went off to serve in World War I, Lynn said.

Million-dollar-plus home sales surge

The number of homes selling for more than $1 million was up 29 percent in the Bay Area in 2012.

Source: DataQuick

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Bay-Area-luxury-home-sales-boom-in-2012-4244363.php

Asking prices for homes for sale around the Bay Area rose substantially in December compared with the same time last year, according to San Francisco real estate website Trulia, ranging from a 16.3 percent spike in tech-fueled Santa Clara County to a 7.6 percent increase in Napa County. The nine-county Bay Area saw an average increase of 13 percent. By comparison, asking prices nationwide rose 5.1 percent in December compared with December 2011, Trulia said.

“Both job growth and tighter inventory gave (sale) prices a lift,” said Jed Kolko, Trulia’s chief economist. “Price increases accelerated throughout 2012, getting bigger as the year went on.”

Analyzing asking prices of homes currently for sale provides a leading indicator of what sales numbers are likely to look like in a few months’ time, Trulia said.

Data on sales throughout much of 2012 have shown the housing market recovering from the extended downturn that started in 2007.

Nationwide, Trulia said, “2012 marked a huge turnaround year for most local housing markets” with prices increasing in 82 of the 100 largest metro areas in December. In December 2011, only 12 markets had price increases.

Las Vegas, Seattle and Phoenix were Trulia’s “top turnaround” markets, followed by Oakland metro (Alameda and Contra Costa counties) and San Jose metro (Santa Clara and San Benito counties).

California cities such as Sacramento and Fresno that were devastated by the housing crisis also saw strong gains in 2012, Trulia said.

“Nine of the top 10 turnaround markets in 2012 were in the West,” Kolko said. “The only one east of the Rockies was Atlanta.”

Asking rents also rose, with Alameda County seeing the biggest spike (13.2 percent) and already pricey San Francisco the least (2.9 percent), Trulia said. The average increase for eight Bay Area counties (Napa did not have enough data) was 7.8 percent. Nationwide, rents grew 5.2 percent.

“We’re seeing rent increases across the region,” Kolko said. “In San Francisco they were smaller because rents are already so much higher there than elsewhere and it has had strong rent increases before this. The slower increase doesn’t make the city affordable.”

While rising home prices illustrate a housing market beginning to recover – and to stimulate economic recovery – they of course are not good news for those house hunting.

“They come with the perennial challenge of affordability in the Bay Area,” Kolko said.

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Bay-Area-rents-home-prices-up-sharply-4163037.php

Drawn by the relative bargains after housing’s free fall of the past few years, many foreign citizens view U.S. residential real estate as a safe place to park their euros, pesos, rupees, loonies, pounds or yuan.

“Housing is much more affordable in the U.S. than it has been, both for Americans and foreigners,” said Jed Kolko, chief economist with real estate site Trulia.com. “In markets where prices fell dramatically during the housing bust, foreigners have been searching for and buying bargains.”

Foreign buyers plowed $82.5 billion into U.S. homes for the 12 months ended in March, up 24 percent from $66.4 billion the year before, according to the National Association of Realtors, which does an annual survey on international buyers.

The sales – which represented 8.9 percent of all home purchases – were evenly split between recent immigrants and nonresident foreigners, the Realtors group said.

In the nine-county Bay Area, about 6 percent of all property searches by prospective buyers come from abroad, according to Trulia.com, which gets 100 million page views on its site every month. San Francisco is by far the most popular search location for foreigners. Since it is a high-cost area with a thriving job market, it seems likely that many searchers are not looking for rental properties for investment purposes but instead are looking to move to the city.

No U.S. credit history

That was the case with Anant Sapatnekar, 40, who was born in India and after 16 years in Canada has joint Indian-Canadian citizenship. Sapatnekar moved to San Francisco for a software engineering job a few months ago and decided to buy a home to establish himself in his new city.

He faced the usual challenges of sticker shock and a competitive market. But his citizenship added some special hurdles.

“It turned out because I didn’t have any U.S. credit history, I didn’t have FICO scores and all that stuff that U.S. banks required” to get a mortgage, he said.

His first accepted offer fell through when he couldn’t get a home loan in time. Eventually he lined up financing from the U.S. division of the Royal Bank of Canada, since it was able to track his Canadian credit history.

In another way, his status as an immigrant helped him.

When Sapatnekar found a Bernal Heights condo that he liked, his agent encouraged him to write a personal letter to the seller.

“I wrote something from my heart about how I just moved here to start a new life, uprooting myself from one country and starting all over again for the second time,” he said. “I said I really liked the house and it would really help me if you sell it to me.”

His agent, Robert Carter of Vanguard Properties in San Francisco, said: “The seller was an overseas immigrant as well, who came from another country with nothing. She started tearing up (when she read the letter). There were other offers for more money, one of which was all cash” – but she picked Sapatnekar.

Nationally, Florida, California, Texas and Arizona are the preferred states for foreign buyers, the Realtors group found, with Florida accounting for 26 percent of international sales and California in second place with 11 percent. Slightly more than half (55 percent) of the buyers came from five countries: Canada, China (including Taiwan and Hong Kong), Mexico, India and the United Kingdom.

Financing a challenge

In the Bay Area, Trulia found that Canada and the United Kingdom were where most foreign searches originated. In San Mateo, people from Hong Kong, China and Taiwan were heavy searchers, while in Santa Clara County, Indian nationals did a lot of searches.

As Sapatnekar discovered, financing can be a huge challenge for foreign buyers, which may limit the pool to those with deep pockets. The Realtors survey found that 62 percent of international buyers simply paid in cash.

But even those with resources at home may face restrictions.

“The biggest challenge I have with (overseas) buyers is getting their money into the United States,” said Mary Beall, an agent with Prudential California Realty in Walnut Creek. “Many countries have limitations on how much money (citizens) can take out.” One buyer from the Philippines spent several years moving money into a U.S. account in order to pay for a home. “When you make an all-cash offer on a house, if your money is not sitting here in a bank account, they won’t take your offer,” she said.

Luxury properties

Some overseas buyers have such deep pockets that it’s not an issue.

Russian venture capitalist Yuri Milner, an early Facebook investor, bought a 25,500-square-foot Los Altos mansion last year for a cool $100 million – the highest price ever paid for a single-family home in the United States. Modeled on an 18th century French chateau, it has indoor and outdoor pools, a ballroom, and a tennis court, the Wall Street Journal said.

“Lower end” luxury properties are bargains these days. Anna Roberts of Coldwell Banker Residential Brokerage represents a Dubai oil executive who paid $1.75 million for a luxury home in the Marin community of Ignacio. “The owner had put over $3 million into it, so it was an excellent value,” she said. Her buyer plans to use it for family vacations.

“There are cultural differences and sensitivities” in working with overseas buyers, she said. “They need lots of additional information.”

Serbian national Milos Citakovic, 26, who moved to San Francisco four months ago as co-founder of a text-messaging company called Poosh.com, said he is seeking a two-bedroom condo here in the $800,000 range – and considers that a bargain, especially after having recently lived in Moscow, where prices are even more outrageous than here.

“The dollar is relatively weak against the euro. A million bucks in the U.S. is more like $800,000 in Europe, so we are basically saving 20 percent on the exchange rate when we come over from Europe to buy here,” he said.

Citakovic said he knows it would be hard to get a mortgage here, so he plans to pay all cash – thanks to a previous tech company he founded, he has the funds. Getting his money out of Serbia just involves a wire transfer.

After his company takes outside financing, he would be interested in investing in real estate here, Citakovic said. “I think it’s a good investment because it brings predictable cash flow,” he said. “There’s a very limited supply in San Francisco. The way it looks right now, it’s easy to sell and things are moving quickly in case you might need to pull the money out.”

Interest expected to decline

Meanwhile, Kolko expects foreign interest in U.S. real estate to decline in coming months as prices continue to climb.

“As prices start to rebound in the U.S., foreigners are searching here less since prices are no longer quite the bargain they had been a year ago,” Kolko said.

Where foreign house hunters come from

Canada and the United Kingdom were the most common countries of origin for foreign people searching for Bay Area real estate during the 12 months ended June 30. There was some regional variation among international searches targeting the various Bay Area counties. Countries are listed in order of where the most searches originated from.

Bay Area (all 9 counties)

– Canada

– United Kingdom

– Australia

– China

– France

– Germany

– India

– Hong Kong

– Taiwan

– Japan

Alameda

– Canada

– United Kingdom

– China

– Australia

– India

Contra Costa

– Canada

– United Kingdom

– India

– China

– Denmark

Marin

– United Kingdom

– Canada

– France

– Germany

– Australia

Napa

– Canada

– United Kingdom

– Australia

– France

– Japan

San Francisco

– Canada

– United Kingdom

– Australia

– France

– Germany

San Mateo

– Canada

– United Kingdom

– Hong Kong

– China

– Taiwan

Santa Clara

– Canada

– United Kingdom

– India

– China

– Taiwan

Solano

– Canada

– Philippines

– Germany

– United Kingdom

– Mexico

Sonoma

– Canada

– United Kingdom

– Germany

– Australia

– Mexico

Source: Trulia.com

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/business/article/Foreigners-shop-for-Bay-Area-real-estate-3850028.php

Nationally, rents rose 4.7 percent in August from a year ago, which, while still a gain, is down from the 5.8 percent annual increase in May – making it the slowest rise since March, according to Trulia.com. Some markets, however, are still hot, with rents up around 10 percent year over year. These include Houston and Seattle, Denver and San Francisco.

“Rents had been on fire earlier this year, but some of the hottest rental markets are starting to cool,” said Jed Kolko, Trulia’s Chief Economist. “New construction that started last year is finally coming onto the market, giving renters more choices and some relief from rising rents. Still, rents are climbing in nearly all of the major rental markets.”

Investors in the multi-family apartment space don’t seem concerned, as we noted in a post last week, with most saying that an improving housing market can peacefully co-exist with a strong rental market for a time, as long as rents don’t become completely unaffordable.

Much of the improvement in housing is thanks to investors, not regular home buyers. Witness yet another drop in weekly mortgage applications today, the fifth straight week, according to the Mortgage Bankers Association. Applications to purchase a home were down just under one percent. This as the rate on the 30-year fixed fell. Again that points to a continued strong rental market.

A new report from Rent.com quantified many of the reasons potential buyers are delaying home ownership: 47 percent are waiting to save a down payment , 11 percent are waiting for the real estate market to stabilize, 22 percent are waiting for their credit to improve to qualify for a home loan, and 20 percent are waiting to feel more secure about their employment situation.

A bright spot is that while construction spending on home renovations is falling, apparently renters are investing more in their spaces. 47 percent have spent more money in the last three years or plan to spend more to improve their rental units, according to Rent.com. 63 percent of renters planning to spend more are going to spend money on furniture and décor they can take with them.

Credit, attitudes toward home ownership and a still shaky housing recovery will likely hold the rental market in good stead for many years. An easing in rental rates is likely due to more supply coming on line in the multi-family sector, while single family rent strength will vary neighborhood to neighborhood.

Questions?  Comments?  And follow me on Twitter @Diana_Olick