The national average rent was $1,792 last month, up 17% from a year ago, according to a report from Realtor.com. Studio, one-bedroom and two-bedroom rentals have seen double-digit increases over the past year.
February saw the seventh consecutive month of rents rising at double rates, after rents collapsed in some of the biggest cities during the pandemic.
“With rents up about 20% over the past two years, rental rates are likely to remain high, but we expect some respite from the recent accelerating pace,” said Danielle Hill, chief economist at Realtor.com.
In some cities, rent increases have been staggering. Miami saw the fastest growth, with average rental price up 55% in February compared to last year, making it the least affordable market among the top 50 cities, according to the report.
The cities with the lowest rent increases were Cleveland, Minneapolis and Detroit, where rents rose just 6% or less in February compared to last year.
San Jose, California, remains the most expensive place to rent, with an average rent of $3,024 per month, followed by San Diego, Los Angeles, San Francisco, Miami, and New York.
“With rents soaring nationwide, February data suggests that many tenants’ budgets may be exceeding their affordability line,” Hill said.
Sunbelt rent prices rise faster
Sun Belt continues to attract new residents who are attracted by the relative affordability, attractive lifestyle and increased ability to work remotely. As a result, all 10 of the fastest growing rental markets are located in the southern tier of the United States, including four in Florida.
After Miami, the cities with the biggest jumps in annual rents were Orlando and Tampa, Florida. Austin, Texas; San Diego; Las vigas; Phoenix. Jacksonville, Florida; Memphis, Tennessee; and San Antonio, Texas – with rents increased by 23% or more.
Rents take a larger share of the income
The general rule is to keep your monthly housing costs at 30% or less of your monthly income. But even if wages are rising in some industries, rents are rising much more — and taking a larger share of monthly income.
Sun Belt cities with strong internal migration are some of the cheapest places to rent, based on Realtor.com analysis.
As the least affordable city to rent, Miami averages $2,929 per month, which is nearly 60% of median monthly income, leaving renters there cost-burdened.
Rental’s share of income was more than 30% in 14 of the top 50 cities, including Los Angeles, where rent accounted for 46% of monthly income; It is followed by Riverside, California, with 45.9%, and Tampa, Florida, with 44.7%.
Meanwhile, the cities identified as affordable are the places where rent is high, but eating up no more than 30% of median income. The analysis found that Kansas City was the most affordable city to rent. Although rent there jumped 11% in February compared to last year, the median rent of $1,216 a month only ate 20% of median income. Other affordable cities included Oklahoma City, Denver, St. Louis, and Washington, DC.
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