These U.S. Cities Have Seen the Biggest Hike in Rent Prices
As inflation, higher interest and mortgage rates, lack of supply and skyrocketing house prices combine to make the housing market a very unwelcoming place for new home buyers, things aren’t looking any brighter for renters.
Rent prices have increased sharply in the last few decades, with a surge of 149 percent in the median rental prices reported in the U.S. between 1985 and 2020, according to data from Real Estate Witch, a service that provides real estate advice.
In the same period, the average median income grew by only 35 percent, meaning rent prices rose four times faster than people’s wages.
The COVID-19 pandemic might have offered a moment of respite to the rental market, with prices declining by as much as 20 percent in some cities across the country. But, like many other sectors and activities after the end of lockdowns and restrictions, rental prices have rebounded.
Real Estate Witch found that the two percent growth rate in rent prices common in 2019 has now doubled.
These, according to Rent.com, are the cities where rent prices have increased the most year-on-year in the month of June, comparing 2021 with 2022, for one-bedroom apartments:
- Austin, Texas (+ 108.2 percent)
- Jersey City, New Jersey (+ 51.6 percent)
- Tempe, Arizona (+ 49.3 percent)
- New York, New York (+ 41.0 percent)
- Salt Lake City, Utah (+ 40.5 percent)
- Long Beach, California (+ 39.6 percent)
- Fremont, California (+ 38.2 percent)
- Richmond, Virginia (+ 35.7 percent)
- Tacoma, Washington (+ 32.8 percent)
- Portland, Oregon (+ 32.2 percent)
Six of the cities in this list—Jersey City, Tacoma, Fremont, Tempe, Richmond and Salt Lake City—have populations of 300,000 or less. Some of the same cities also experienced the biggest rent prices increases for two-bedrooms apartments, year-on-year, in June:
- Jersey City, New Jersey (+ 57.7 percent)
- Fort Wayne, Indiana (+ 56.5 percent)
- Salt Lake City, Utah (+ 53.9 percent)
- Durham, North Carolina (+ 51.3 percent)
- Raleigh, North Carolina (+ 48.9 percent)
- Knoxville, Tenneessee (+ 47.8 percent)
- Lexington, Kentucky (+ 47.2 percent)
- Fayetteville, North Carolina (+ 41.7 percent)
- Portland, Oregon (+ 39.1 percent)
- Mesa, Arizona (+ 37.5 percent)
From the two lists combined, we get three cities that have overall been affected by the biggest rent increases: Jersey City, Portland, and Salt Lake City, which have suffered higher prices for both one- and two-bedroom apartments.
The reason why rent is going higher in these cities is the same as across most of the country but is exacerbated by the specific situation of these urban metros: rising inflation and more demand than there is supply.
At this pace, renting a place is becoming less and less affordable in these cities. For many, it means living paycheck to paycheck, and being unable to save—a key step on the way to homeownership.
But as home prices increase at the same time as rent, many wishing to buy a home might see this dream slip away. Rental prices have partially increased because of the number of people who, unable to buy a home, have flooded the rental market.
The same lack of supply which drove up competition in the housing market exists in the rental market and has left landlords the power to rise rent without fear of losing potential tenants, as the number of apartments available is limited.
As people start falling behind rent, evictions have gone back to the levels they were before the pandemic, the non-profit news organization Truthout reported in March.
Rent prices have, though, stabilized this month, according to Rent.com, and prices for two-bedroom apartments have decreased by 13 percent year-on-year at the state level.