Rents hit a record high in July for the 17th consecutive month, putting even more pressure on tenants.
The national median rent hit a new high of $1,879 per month in July, up 12.3% from a year ago, according to Realtor.com. With rents hitting new highs for nearly a year and a half, there are some early signs that the market may be beginning to calm down: July marked the sixth consecutive month of moderate growth, falling 17% in year-on-year. annual rent increase in January.
Still, rents rose by double-digit percentages in all size categories in July from a year ago, with monthly studio rents rising 14.3% to $1,555; one-bedroom units, up 12.2% to $1,745; and both bedrooms, up 11.7% to $2,103.
The South and North East saw the highest rent increases. Miami, where rents are up 26.2% from a year ago, saw the biggest increase among the 50 largest U.S. cities for the 10th consecutive month. Miami was followed by New York, Boston, Chicago and Orlando.
Many tenants scrambled to find a rental they could afford or chose to absorb a rent increase on their current home. But moving into a new apartment has been more expensive for renters, according to a survey by Avail included in the Realtor.com report.
Tenants saw larger price increases on new leases — an increase of around $300 per month over their previous rent, on average — compared to renewals, which averaged around $160 per month.
“Whether it’s downtown or suburban, whether they’re staying put or making a move, renters are stuck between a rock and a hard place when it comes to affordability,” said Danielle Hale, Chief Economist of Realtor.com.
Rents are rising everywhere, even in “affordable” suburbs
After being hit hard during the pandemic, urban rents are rising slightly faster than those in suburban areas, with rent growth in cities up 12.8% versus an 11.7% year-on-year increase. the other in July for suburban areas, according to Realtor.com. That’s a reversal from January 2021, when urban rent fell 2.5% year-over-year and suburban rent rose 3.9%.
Yet the rental landscape has not returned to its pre-pandemic image. While cities are still more expensive, the gap between town and city rents has narrowed. A renter would have paid a 12.4% premium for living in an urban area in July 2019, but that premium was only 5.8% – or $107 per month – in July 2022.
“Compared to three years ago, when rental premiums were typically concentrated in urban centers, renting is now almost as expensive in the suburbs, where the rise in remote working has led to increased demand” , Hale said.
She said the days of lower premiums for downtown rentals are numbered as the return to office work and the lure of city living trigger a relative increase in city rent growth.
“Put simply, tenants are feeling it everywhere,” Hale said.
Rent growth is expected to slow
But there may be some relief to come.
“July data shows rent growth stabilizing at a relatively calmer pace than in 2021,” Hale said.
Although 72% of landlords announced their intention to increase rents over the next year, the rate remained stable in the second quarter compared to the previous quarter after jumping considerably from January to April, according to the quarterly survey of rents. landlords and tenants through Avail.
When asked why they plan to raise rents, landlords cited higher costs for property management expenses, including tax payments, maintenance and upkeep, and utilities. Also, fewer landlords plan to sell properties in July compared to January, now that the sales market has cooled and rents have soared, according to the survey.
“Like renters, landlords are feeling the financial pain of the inflationary economy,” said Ryan Coon, co-founder of Avail and vice president of rentals at Realtor.com.