10 cities where rents are rising the most

It's not usually welcome news when the landlord raises your rent. But a surge in rents this year represents a counterintuitive bit of good news for the economy and perhaps even for the beleaguered housing market.

Like home prices, rents fell nearly everywhere during the recession, as millions of people moved in with parents or found roommates to cut their housing costs. But with the gradual improvement in the job market and the overall economy, grown kids are finally waving goodbye to their parents and many others are moving into places of their own. That's pushing high vacancy rates back down, toward levels they were at before the recession — and sending rents back up. Research firm Reis estimates that rents will rise an average of 3.6% in 2011. In a few hot areas, like parts of Washington, D.C., and New York City, rent increases could exceed 10%.

That sounds like bad news for tenants, but it indicates that more people can afford the added expense and that parts of the economy are getting back to normal. Eventually, higher rents could turn many tenants into buyers, since purchasing a home will start to seem like a bargain compared with sending a monthly check to a landlord. So rising rents today could signal a pickup in home purchases soon. Here's where rents are likely to rise by the most in 2011, according to Reis.

Note: Rent figures are projected averages for all of 2011 and represent "asking" rent, which is the amount a landlord requests. That may be slightly higher than actual rent paid. Annual increases are full-year projections for 2011. Figures for the suburbs surrounding Washington, D.C., have been omitted but are similar to the D.C. figures. Unemployment rates are for metro areas, except for Orange County, which is countywide.