When rent rose 1.7 percent last year through March, economists assumed the market was correcting itself after years of undervalued rent.
It’s rising nearly double that rate so far in 2022, with some cities seeing the price of rental housing climbing as much as 38.4 percent year over year.
The monthly cost of renting a one-bedroom home has reached record highs in 13 of the past 14 months, according to the latest rental report by Zumper. The price for a two-bedroom unit has risen for 15 straight months, the report said.
“More remarkable than hitting new all-time highs is that the pace of rent growth in 2022 is accelerating relative to the torrid pace of 2021,” Zumper said in its report. “While the ‘market correction’ theory doesn’t appear to hold water anymore, rising rent can be traced to rising home prices.”
Home sale prices rose nearly 20 percent year over year in February 2022, the third-highest annual gain in 35 years, according to the Corelogic Case-Shiller Index. That was an uptick over the previous month.
The rapid and sustained increase in home prices has both priced out would-be homeowners, leaving them in the rental market, while also driving up the price of rent.
“As home valuations rise in any given market, it prices out renters who were on the bubble of being able to buy a home, leaving them in the rental market,” Zumper wrote.
The ongoing increase in rent shows that the rapid growth from 2021 will be the norm for the time being.
Who’s No. 1?
Miami leapt above Boston for the No. 3 spot. Rent in Miami jumped 38.4 percent year over year. A one-bedroom home now costs $2,630 a month.
“When the pandemic began in March 2020, Miami ranked 10th on the list,” Zumper said. “It has jumped every major West Coast city except San Francisco.”
The report notes Miami’s suburbs are also seeing rent rise at nearly 40 percent year over year, and a surge in demand is driving up the price of rent across Florida.
San Diego’s 27 percent rise bumped it up past both Los Angeles and San Jose to the No. 5 spot on the list.
Rent in the West largely either remained near stagnant or declined last month, the report said.
New York remains the most expensive city to find a one-bedroom rental. The median one-bedroom unit costs $3,420 a month.
In San Francisco, it’ll cost renters $2,900 for a one-bedroom. If they want a two-bedroom home, however, they’ll have to fork over $4,000 a month. That’s the most expensive median two-bedroom market in the nation.