The USC Casden Multifamily Forecast report released on Tuesday predicts that rents will continue to rise in the area despite new construction, as demand for rental housing continues to increase.
USC Lusk Center for Real Estate Director Richard Green said the market is being fueled by rising home prices.
“Despite marked improvements in employment and the economy, the rapid increase in home prices and interest rates are pricing first-time homebuyers out of the local market,” he said in a statement.
Between the four areas tracked, which comprise the Inland Empire and L.A., Orange and San Diego counties, almost 6,700 new units were constructed in the 12 months that ended June 30, the report stated.
Throughout L.A. County, rents increased 2.9 percent to an average of $1,435. Only Orange County has a higher average rent among the four areas at $1,572.
Los Angeles County has the second lowest vacancy rate at 3.2 percent, with San Diego County at 2.3 percent.
The study predicts that rents will increase for at least two more years across all of Southern California, while vacancy rates will continue to drop.