by Calculated Risk on 1/05/2007 12:15:00 AM

This is interesting. When the housing bust started a year ago, rents started to rise. But now it appears many frustrated homeowners are trying to rent their vacant homes, putting some downward pressure on rents.

From the WaPo: Cold Sales Give Renters a Break

As home sellers grew more frustrated with the slow local real estate market in recent months, they abandoned their for-sale signs and put their homes up for rent. That has increased choices and cooled prices for tenants in one of the tightest and most expensive parts of the country.

"This is the first sign that the cooling housing market is having an impact on the rental market," said Gregory H. Leisch, chief executive of Delta Associates ...

As competition for tenants intensified, apartment rents did not rise as sharply in the past three months of 2006 as they had earlier in the year, the report said.

Just this morning, Ivy Zelman of Credit Suisse wrote: Vacancy Sales Loom Large.

"... we have not addressed the explosion of vacant listings and the implications on the housing market food chain, a factor that we and several of our private industry contacts believe deserves attention."

Click on graph for larger image.

"The proportion of single family vacant homes for sale and for rent relative to total housing stock is at the highest level since at least 1993 (as far back as our data series goes). The recent surge in vacant units for sale, as the capitulation by distressed sellers accelerates, may provide a persistent headwind to the [housing] recovery."

This WaPo story suggests that these vacancies might also provide a headwind for rents.