Rising rates, tight supply continue in Twin Cities rental market

The Twin Cities apartment rental market remains tight, and rents are still rising.

The apartment vacancy rate in the third quarter of the year was 2.5 percent, up slightly from the prior quarter, according to the real estate consulting group Marquette Advisors.  The metro rental market is favoring property owners, the group said.

Rents, meanwhile, continue to rise. The average Twin Cities rent climbed to about $980 in the third quarter,  nearly 4 percent higher than during the same period last year, according to the Marquette data.

The low vacancy rates mean fewer options for renters. And housing organizations say higher rents are pushing some low-income renters into homelessness.

While the rental market is still tight, some landlords are offering concessions on rent, a sign that things are easing, said Herb Tousley, a real estate professor at the University of St. Thomas. ”It’s not happening in all areas, but starting to get some hints here and there that it’s going to happen,” he said.

Downtown Minneapolis will see more high-end apartments coming online soon, although those projects won’t do much to help lower-income renters struggling to find affordable housing, he added.