Where In The U.S. Are Rental Prices Rising Faster Than Anywhere Else?
At the start of the COVID-19 pandemic in 2020, many large American cities lost population because so many corporations and businesses allowed staff to work remotely. Consequently, rental property prices dropped. But throughout 2021, the cost to rent an apartment or house rebounded, rising 10% on average. However, in some places like Austin, Texas, rents skyrocketed with an astonishing 30% increase, according to Realtor.
At the top of rental prices rising the fastest in the U.S., Austin's housing issue is driven by the city's general popularity, the addition of over 30,000 jobs in the area, plus supply-chain woes and personnel shortages that negatively impact new construction. Builders simply can't get materials and supplies to sites in a normal, timely manner as they used to be able to do. NPR recently reported on renters in the Texas city engaging in a previously unheard-of occurrence: bidding wars for rentals that are causing stress for renters.
Rent is rising, especially in these cities
Austin was hardly alone in rising rental prices; these markets also raised the roof in terms of pricing for one and two-bedroom apartments. New York City's average cost went from a median of $1,575 per month to $2,101 in 2021. Rent also rose in the fastest-growing metropolitan areas in Florida and Arizona. Tampa saw a 31% increase and Orlando 30%, while Scottsdale (outside of Phoenix) also saw a 31% increase and Mesa a 29% increase.
Another growing state, Nevada is also seeing increases in rental prices. There, a one-bedroom unit rose from $1,487 in the third quarter of 2020 to $1,814 one year later, a 22% increase on average. Apartment costs in Reno rose a whopping 31% and those in Las Vegas rose 17%. Additionally, The Washington Post reports top U.S. cities with the fastest rising rent include Boise and Spokane in the Northwest and the California cities of Stockton and Riverside.
Reasons for rent increases and more for 2022
Those who study the market say the reasons behind the jump in rental prices mirror the issues Austin is facing. Thousands of people move to growing cities with mild-weather every year. Additionally, Millennials, Gen Z, and other young families are leaving the priciest real estate markets of the country in search of good housing that's more affordable. Worse, as the demand for housing across the country grew into a frenzy last year, many potential home buyers found themselves out-bid in the marketplace, per The New York Times. Delaying homeownership puts even more pressure on the rental market.
Zumper, a digital rental listing site, indicates the trend of fast-rising rents in the U.S. will continue into 2022. Early data indicates that the cost of rentals is expected to increase in the largest metropolitan areas like New York, San Francisco, and Miami. However, cities including Boston, San Jose, and Washington D.C. are likely to see a big jump in rentals as well. Overall, experts predict a 12 % increase in one-bedroom apartments and a 14% increase in two-bedroom apartments nationwide in the coming year.