U.S. apartment rents are rising in nearly 400 cities, with the median price for a one-bedroom unit jumping more than 25% since June 2021, according to Rent.com. The typical cost for a two-bedroom unit is up 26.5% over this period.
The reasons: A severe shortage of affordable housing, rising house prices and skyrocketing.
“You had a lot of people in late 2020, early 2021 looking to buy a home, and then the housing market really took off — it drove a lot of people awayBrian Carberry, senior director of Apartmentguide.com, told CBS News.
In better news for Americans looking for a place to live, rents have remained relatively stable this year.
“We could start to see stabilization as we get to the end of summer,” Carberry said.
The housing markets around the country that have seen the steepest rent increases: the New York metro area. Boston, Massachusetts? Miami, Florida? San Francisco, California? Seattle, Washington; and Austin, Texas. In Austin, for example, rental prices increased more than 100% compared to 2021.
“People are paying more than $1,000 a month more now compared to a year ago,” Carberry said.
In New York, the average monthly rent is $5,812. In Pflugerville, Texas, a suburb of Austin, the average monthly rent is $4,451. In Jersey City, New Jersey, renters can expect to spend an average of $4,421, according to Apartmentguide.com.
More inventory coming to market could provide some relief. But as long as mortgage rates remain high, more Americans will tend to rent rather than take the plunge into home ownership.
Renting is cheaper than buying in three-quarters of the nation’s 50 largest metro areas, according to Realtor.com. On average, first-time homebuyers can expect their monthly payments to top $2,400, compared to $1,876 for the typical apartment rental.
“So when this [mortgage] The rate starts to come down, then we might start to see some movement from renters to buyers, but until that happens, we’re still seeing a lot of upward pressure on these rental properties,” Carberry said.