Rent has risen 17% since last year, setting a new record

The national median rent was $ 1,792 last month, up 17% from a year ago, according to a report by Realtor.com. The rent of studios, one and two bedrooms has all experienced double-digit increases over the past year.

February marked the seventh month in a row that rents rose by double-digit percentages after rents hit craters in some of the major cities during the pandemic.

“With rents rising by almost 20% over the last two years, rental prices are likely to remain high, but we expect some cooling from the latest accelerated pace,” said Danielle Hale, chief economist at Realtor.com.

In some cities, rent increases have been staggering. Miami experienced the fastest growth, with the average rental price rising by 55% in February from a year ago, making it the least affordable market of the top 50 cities, according to the report.

Cities that experienced the smallest rent increases were Cleveland, Minneapolis and Detroit, where rents rose by only 6% or less in February from a year ago.

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 City.

“With rents rising nationwide, data from February show that many tenants’ budgets can be stretched beyond the affordability limit,” Hale said.

Sun Belt rent is rising the fastest

The sun belt continues to attract new residents, drawn by its relative affordability, attractive lifestyle and an increased ability to work externally. As a result, all 10 of the fastest growing rental markets are in the southern United States, including four in Florida.

After Miami, the cities with the largest annual rental jumps were Orlando and Tampa, Florida; Austin, Texas; San Diego; Las Vegas; Phoenix; Jacksonville, Florida; Memphis, Tennessee; and San Antonio, Texas – all with rent increases of 23% or more.

How much house can I afford?
Rental growth is being driven by an increase in demand, especially from young tenants, many of whom may have been priced to buy a home, according to the report.
Although it is more affordable to buy a start-up home than to rent one in a city like Miami, the report showed that house prices are rising and Mortgage rates are rising and purchase prices rose 31.6% in February from a year ago.
“In light of growing economic uncertainty and the conflict in Ukraine, some households will prefer to buy in an attempt to lock in a virtually fixed monthly payment as a hedge against further inflation,” Hale said. “But rapidly rising mortgage rates and still a limited number of homes for sale could mean some potential buyers can hold on to the flexibility of renting. With rental demand already exceeding supply, rental affordability will remain a challenge.”

Rents take a larger share of the income

A general rule of thumb is to keep the monthly housing expenses at 30% or less of the monthly income. But even though wages are rising in some industries, rents are rising much more – and occupying a larger share of monthly income.

Sun Belt cities experiencing strong inbound migration are some of the least affordable places to rent, based on a Realtor.com analysis.

As the least affordable city to rent, Miami’s median rent is $ 2,929 a month, which fills almost 60% of the average monthly income, making tenants there very burdened.

Manhattan rents are rising to the highest ever

The rental share of income was over 30% in 14 of the top 50 cities, including Los Angeles, where rent accounted for 46% of monthly income; followed by Riverside, California, with 45.9% and Tampa, Florida, with 44.7%.

Meanwhile, cities were determined to be the most affordable places where rents rose but did not eat more than 30% of the median income. Kansas City was the most affordable city to rent, the analysis showed. Although rents there rose 11% in February from a year ago, the median rent of $ 1,216 a month ate only 20% of median income. Other affordable cities included Oklahoma City, Denver, St. Louis and Washington, DC.

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