USA TODAY International Edition
Apartment rent prices at highest level in 2 years
As pandemic- era discounts vanish, and workers return to cities, rents are surging.
Apartment rents are soaring again as the coronavirus pandemic wanes and workers return to cities.
The U. S. median rent hit the highest level in two years in May, increasing by 7.5% over the past two years, according to a report by Realtor. com.
Monthly rents rose 5.5% year- overyear in May to an average of $ 1,527 across studios, one- bedroom and twobedroom apartments.
Of the 50 largest metropolitan areas, 43 saw their median rent increase year- over- year in May, up from 40 in April, and 33 in March.
A year after the pandemic prompted people to leave crowded metro areas – encouraged by remote- work policies, or because huge numbers of layoffs forced them into less expensive areas – renters seem to be gravitating back to cities as vaccination rates rise and jobs come back.
“Some of the households that were moving back in together that we saw during the pandemic, I think that’s shifting and going in the other direction.
“Young adults are setting out on their own again,” says Danielle Hale, chief economist at Realtor. com.
She noted that incomes are still growing and more people are returning to work.
As home prices hit record highs and become less affordable, the appetite for rentals may rise as would- be buyers opt for leasing, Hale says.
According to the report, Riverside, California, was the metro area with the fastest- growing rent, with the median reaching $ 2,020 in May, up 19.2% yearover- year.
The other metro areas topping the list of fastest- growing rents included Memphis, Tennessee ( 17.2%); Tampa, Florida ( 16.9%); Phoenix ( 17%); and Sacramento, California, ( 16%).
Before the pandemic, rents in the 50 largest metro areas grew by 3.2% yearover- year.
Rental markets including San Francisco and San Jose, which have seen steep declines, are seeing those de
clines soften.
San Jose, for instance, increased by 3.7% in the last month.
“So at that pace of improvement, it could see a new high rent in September,” says Hale. “Even though rents are still lower in those areas, they’re making headway, as people are vaccinated, as people get back into cities to not only go to the office, but to restaurants and cafes and bars and museums.”
Many of the rent discounts are about to disappear, and anyone who was hoping to score a less expensive lease in places like San Francisco, San Jose and other major tech centers will soon find those deals gone, Hale says.
“You’ve probably missed the absolute best time. That was probably a couple of months ago, but I think moving sooner, rather than later, you’re likely to be able to lock in a lower price,” she says.
“I think that rents will continue to increase as the economy opened back up and get back to normal.”
She sees rents increasing as the economy reopens.
At the same time, the Sacramento, California, area is seeing a 19% increase in rents compared with two years ago.
That’s because the San Francisco and San Jose metro areas have a high concentration of tech workers. And when they had the chance to work remotely during the pandemic, they took advantage of that flexibility to sign leases in less expensive areas.
For people who did not have to commute but still wanted to stay within an hour and a half of work in case they wanted to go to office so that could get back to the office on occasion, Sacramento was attractive.
“They can realize fairly substantial savings, almost a $ 1,000 a month, by relocating to the Sacramento area,” Hale says.