PHOENIX-Strong employment gains and fiercecompetition for single-family homes has fueleddemand for rental properties here that willpersist well into the new year, according to a fourth-quarterapartment market report by Marcus &Millichap. Companies are hiring at a brisk pace, causingthe unemployment rate to fall to 7.4%, a 120-basis pointimprovement from the beginning of the year.

The report shows a 2.9% increase in total employment, with morethan 50,000 new jobs created this year and 28,600 positions addedto the metro. As a result, median household income here increasedby 4% during the last year, and some households are putting theirhomes up for sale in a manner not seen since before therecession.

Competition for for-sale homes has been strong as cash-heavyinvestors outbid a large portion of potentialhomeowners, which is pushing these would-be buyersto seek new builds or remain in the rental community. However, asthe housing market stabilizes, demand forapartments could slow in the next few years.