By Dan Levy
July 5 (Bloomberg) -- The vacancy rate for U.S. rental apartment buildings was unchanged at 5.9 percent in the second quarter as the housing slump and a weakening economy deterred people from buying homes, Reis Inc. reported.
The average monthly U.S. asking rent rose 1 percent to $1,047, the 25th consecutive quarter that rents increased or stayed the same, according to Reis, a New York-based research firm.
Home prices in 20 U.S. metropolitan areas declined in April by the most on record and new home sales fell 40 percent in May from a year ago.
The slumping housing market means apartment rents should remain steady even as gasoline prices rise and U.S. companies cut jobs, Sam Chandan, chief economist for Reis, said in an interview.
``Our projection is rent growth will moderate through 2009, but we don't think it will turn negative as it did in the early 2000s,'' Chandan said. ``The bias will be weighted toward rental, in our view. People fear home prices will fall further.''
The last time U.S. rents fell was the first quarter of 2002, when they declined by 0.2 percent, according to Reis.
The five-year housing boom that ended in 2006 attracted investment to homebuilding, so fewer apartment buildings were constructed, Chandan said.
``There has been very little apartment development because all the money was made in housing development,'' he said. ``We don't have a strong pipeline of apartments.''
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