Apartment rents forged ahead in some of the country’s largest cities over the past year even as the rise in home prices began to slow.
More than half of U.S. cities have recorded double-digit rent increases over the past year, and some metros are approaching 40 percent year-over-year growth, according to Zumper’s most recent national rent report.
The spike in rents coincides with a purchase market that has reached new levels of unaffordability for many potential U.S. buyers. Growth in home prices may be slowing in most of the country but mortgage rates remain elevated.
The result is that asking rents are becoming out of reach for many Americans, Zumper CEO Anthemos Georgiades said in the report.
“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,” Georgiades said. “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.”
Rent growth was particularly pronounced in New York City, where the rent in August for a one-bedroom apartment was $3,930 — the highest ever recorded by Zumper in any U.S. city. That’s up 4 percent from the previous month and nearly 40 percent higher than their levels this time last year.
Two-bedroom apartments in New York City rose even more quickly, at an annual rate of 46 percent. Rent growth was particularly dramatic in Brooklyn, where prices for a two-bedroom apartment were up 61 percent year over year.
A handful of other cities rivaled New York’s staggering rent growth. In Fresno, California, rent for a one-bedroom apartment was up 40 percent year over year.
“This isn’t strictly good news for Fresno, which is the poorest major city in California,” Zumper’s report reads. “Current residents—a majority of whom are minorities—are facing an affordability crisis and growing inequalities in housing opportunities.”
Rents rose nearly as dramatically over the last year in Tulsa, Oklahoma. Zumper’s report points to the city’s efforts to attract thousands of remote workers through offers of stipends and free coworking space.
Across America’s 100 most populous cities, only two saw annual declines in rent prices.
Rents in Cleveland saw a 5 percent annual decline. And rents were down a whopping 12 percent year over year in Des Moines, Iowa.
Meanwhile, rent growth was beginning to slow in parts of the country — especially the southeast — mirroring the ongoing cooldown in the market to purchase.
Rent prices dropped slightly from July to August in multiple major metros in Tennessee and Florida.
Even in Miami, which remains a relatively hot market, the monthly rent increase dipped below 1 percent in August, Zumper’s records show.
The Florida city had the third-most expensive rents in the country in the spring. But since then, a few other cities have surpassed it, and its moderating rental market has slipped to the sixth-most expensive in the U.S.