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

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

Blomquist adds that the Millennials have proven that they are willing to move to the non-traditional markets that offer good employment opportunities. “I spoke to a realtor in Midland recently who estimates that 9,000 to 11,000 workers commute to Midland and stay in hotels for the work week, boosting hotel room rates and leading to a rash of new hotels being built. Hotels are going up left and right, apartments are going up left and right, and new construction is very strong right now. The energy-driven real estate boom is rippling out to surrounding markets as well.”

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

The firm analyzed 2015 fair-market rental data recently released by the US Department for Housing and Urban Development for three-bedroom properties in 543 counties nationwide with a population of at least 100,000. In the 473 counties with sufficient rental and home-price data, the fair-market rent for a three-bedroom property next year will require an average of 27% of median household income, while buying a median-priced home requires an average of 25% of median household income based on the median sales prices in November. Buying a median-priced home was more affordable than renting a three-bedroom property in 68% of the counties analyzed, representing 57% of the total population in those counties.

Other markets among the 25 for increasing rents included counties 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-market rents decrease at least 13% from 2014 to 2015.

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