Rents in the United States again hit a new high in April, and they are expected to continue to rise.
The national median rent was $1,827 per month in April, up 16.7% from a year ago, according to a report from Realtor.com. The rent has been steadily increasing since the beginning of last year. If recent trends continue, the report projects that typical rent could be over $2,000 per month by August.
The continued spike in rental prices is due to a mismatch between rental supply and growing demand, largely from potential buyers, said Danielle Hale, chief economist at Realtor.com. Overwhelmed by the high cost of buying a home, some potential owners are choosing to continue renting instead.
“Tenants have few options, but to cope with higher rents and, in some cases, even offer above [the landlord’s] ask for a price — whether they can afford it or not,” she said.
There are signs that the pace of rent increases is beginning to slow. April marks the third straight month in which annual rent growth has slowed from January’s peak. Still, while annual price growth has fallen slightly from March – when rents climbed 17% year-over-year – the increase in the past month has been significant.
And some cities have seen even more jaw-dropping rent increases. Miami saw the fastest growth in April, with the median rental price jumping 52% to $2,800. That’s $950 more than a year ago.
Other cities in the Sun Belt also saw strong year-over-year growth, including Orlando and Tampa, Florida; San Diego and Las Vegas.
Pittsburgh, Detroit and Minneapolis saw the lowest annual rent growth in April, all with rents that rose 5.5% or less annually.
“Rents not only max out tenants’ housing budgets, but they are the biggest strain on their overall finances, even as inflation drives up spending across the board,” Hale said.
Rents for bachelor apartments, which are often the most affordable housing option, continued to grow at a faster rate than larger units. This reverses last year’s trend, especially in larger metropolises like New York, where studio rents are up 29% since last year; Los Angeles, where they are up 23%; and Chicago, with a 22% increase. While studios were quickly vacated at the start of the pandemic, they are now in greater demand from those looking to move into somewhere they can afford on their own or when they return to major city centers.