The Unemployment Report for February released last Friday showed some positive signs. The actual unemployment rate held firm at 4.9% which is already half of what it once was just a few short years ago and that’s a positive sign.

Job creation has also been in positive territory for 65 straight months as our economy has gradually begun to get back on track. Nothing stellar mind you but a recovery nonetheless. 242,000 new payroll jobs last month is one of the better readings for some time. But looking a bit deeper in the details we can also see another trend- home values rising at a nice pace but the fuel that is needed to afford a home is lacking.

According to the data, the average weekly earnings were down 1.6 percent year-over-year. At the same time, home prices are climbing. In January home prices nationally rose by a respectable 6.9% from January of 2015. So, if home values are rising and wages are actually falling, what would you expect? A housing slowdown at some point. If millennials aren’t buying and baby boomers aren’t selling that could indicate lack of inventory.

This lack of inventory and soft wages is a unique combination but all it does is fuel the demand for rental units. This demand for rental units will also help drive up revenue for real estate investors but that could also keep a cap on rental income. So far however, that cap is nowhere to be seen. Consumers are much more able to put down a deposit and rent compared to putting down 20% and getting a mortgage. It’s just at some point home values will have to meet somewhere in the middle with stagnant wages. Until then, we can expect a continued demand for rental housing.