Rents have soared as housing affordability has been crimped by soaring inflation and a shortage of accommodation in some demographics. Over half of US cities are showing double-digit rent hikes, with some over 30%. Renters have been squeezed as real wages decline and the situation is getting more dire in many US metro areas. Last month’s CPI shelter index was up 0.5%, with the rent index up 0.7% and owners’ equivalent rent index up 0.6%. The shelter index is up 5.7% year-over-year. The Zumper National Rent Index shows the median national one-bedroom rent for a newly listed one-bedroom now at $1,486, up 11.8% over August 2021 a new record high.
Notable Trends in National Rents via Zumper
- National one-bedroom rents continue to reach new highs.
- Renters are being forced to sacrifice on location, size or amenities; move in with roommates; or even opt out of the traditional 12-month lease altogether.
- New York City remains the priciest city in the nation. Median one-bedroom rent throughout the city is up 39.9 percent year-over-year and two-bedroom median is up 46.7 percent. Price increases are especially drastic in Brooklyn, where two-bedrooms are up 61 percent year-over-year.
- Fresno, CA and Tulsa, OK have seen especially fast price hikes: Fresno’s one-bedroom median is up 40 percent year-over-year and Tulsa’s is up 38.9 percent.
Source: Zumper Inc.
New Homes the Biggest ‘Sticker Shock’ for Americans
Much of the national conversation about inflation has focused on groceries and gas–everyday purchases impacting nearly every American. The biggest ‘sticker shock’ is people looking for a new home.
- Grocery prices are up 13.1 percent year-over-year, the highest increase in more than four decades.
- Zumper’s data shows double-digit year-over-year rent hikes in more than half of U.S. cities, with several cities posting hikes of 30 percent or more.
- Just two cities on Zumper’s top 100 list show a year-over-year decline in one-bedroom rent: Des Moines, IA is down 12 percent over last year, and Cleveland, OH is down 5.4 percent.
Most Expensive Rents
New York City continues to be the most expensive to rent, median one-bedroom rent up 39.9% year-over-year. Two-bedroom apartments are paying 46.7% more. Manhattan leads the boroughs, with monthly rent climbing to $4,212, up 27% over last year. In contrast, nearby Staten Island’s median one-bedroom rent is up only 5%, at $1,582.
There are 18 cities where average one-bedroom rents still come in under $1,000, with Akron, Ohio, topping the list.
The only cities showing a decline in rents are Des Moines, Iowa, which is down 12% over last year, and Cleveland, Ohio, down 5.4%.
“We’ve seen Zumper users sacrifice on space, location, amenities and roommates for years; more recently, we’ve noticed some are getting creative as they search for an affordable home. Many renters are turning to short-term rentals to fill a temporary gap in housing, especially if they can’t afford hefty deposits and move-in fees,” said Zumper Chief Executive Officer Anthemos Georgiades in the report.
Zumper recently secured an additional $30 million to start offering short term rentals on a monthly and nightly basis.
There are signs in the Sun Belt rents are cooling off: Nashville and Memphis in Tennessee also Fort Lauderdale and St. Petersburg in Florida had small month-over-month losses. Rents in Miami continue to climb, up 0.8% over last month and 34% over last year with anything under 1% month-over-month growth is considered modest, according to Zumper.
Prospective renters get creative in response to crushing inflation via Zumper
“Current asking rents are simply out of reach for many Americans, especially young people,” explains Zumper CEO Anthemos Georgiades. “We’ve seen Zumper users sacrifice on space, location, amenities and roommates for years; more recently, we’ve noticed some are getting creative as they search for an affordable home. Many renters are turning to short-term rentals to fill a temporary gap in housing, especially if they can’t afford hefty deposits and move-in fees.”