The tighter rental market comes at a time when home sale prices are dropping, the Los Angeles Times reported Monday. But it could be a sign of a turnaround in the housing market as investors buy foreclosed houses to convert to rental properties.
"Fundamentally, it is an issue of supply and demand," Stan Humphries, chief economist for the Web site Zillow told the Times. "The foreclosure crisis is essentially a giant engine converting owner households into rental households."
Between January 2011 and January 2012, rents rose an average of 3 percent across the country, while home prices dropped 4.6 percent, Zillow said.
There has been little new construction since the economic slump began, creating a shortage of available rental properties, the newspaper said.