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IRVINE, CA—Markets whose fair-market rents are increasing themost, including Williamsport, PA; and Midland, TX, are experiencingoil and gas booms facilitated by fracking,according to a report from RealtyTrac. Both markets, alongwith Elizabethtown, KY, which is hone to the Fort Knox US Armypost, saw an increase of 24% or more in fair market rents this yearcompared to the previous year.

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Daren Blomquist, VP ofRealtyTrac, tells GlobeSt.com, “The strong demandand lack of inventory is placing upward pressure on both rentalrates and home prices in these areas. We are seeing Millennialsmove to places like Williamsport, PA, and Midland, TX, both ofwhich saw an increase of 24% or more in fair-market rents in 2015compared to 2014. Williamsport and Midland are both experiencingoil and gas booms facilitated by fracking and as the demand growswe will see spikes in rental rates.”

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Blomquist adds that the Millennials have proven that they arewilling to move to the non-traditional markets that offer goodemployment opportunities. “I spoke to a realtor in Midland recentlywho estimates that 9,000 to 11,000 workers commute to Midland andstay in hotels for the work week, boosting hotelroom rates and leading to a rash of new hotels being built. Hotelsare going up left and right, apartments are goingup left and right, and new construction is verystrong right now. The energy-driven real estate boom is ripplingout to surrounding markets as well.”

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As GlobeSt.com reported last week, renting a home is lessaffordable than buying in most US markets, but not where Millennials are moving the most, according tothe report. In markets with the biggest increase in the Millennialshare of the population over the last six years, renting is themore-affordable option.

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The firm analyzed 2015 fair-market rental data recently releasedby the US Department for Housing and UrbanDevelopment for three-bedroom properties in 543 countiesnationwide with a population of at least 100,000. In the 473counties with sufficient rental and home-price data, thefair-market rent for a three-bedroom property next year willrequire an average of 27% of median household income, while buyinga median-priced home requires an average of 25% of median householdincome based on the median sales prices in November. Buying amedian-priced home was more affordable than renting a three-bedroomproperty in 68% of the counties analyzed, representing 57% of thetotal population in those counties.

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Other markets among the 25 for increasing rents includedcounties in Denver; Asheville, NC; Chicago; and Santa Barbara, CA.Markets with the biggest drops in fair-market rents were Sumter,SC; Las Cruces, NM; and Longview, TX. All three saw fair-marketrents decrease at least 13% from 2014 to 2015.

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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.