Increase in rents outpaced the increase in the monthly cost of buying a home
Average monthly rents increased 21% nationwide over the past year and 7% in a single month, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. These are the highest annual and monthly growth rates in at least two years—as far back as Redfin’s rental data goes.
The national median monthly mortgage payment for homebuyers climbed at about the same annual rate—20%—but rose just 1% from October. Rapidly increasing housing costs are a big contributor to overall inflation, which hit 6.8% in November, its highest level since 1982.
“First inflation came for the for-sale housing market, and now it is coming for the rental market,” said Redfin Chief Economist Daryl Fairweather. “Many people have been priced out of the for-sale market and are looking to rent instead, but that demand is pushing up rents. Anyone who bought a home before this year can pat themselves on the back because their mortgage payments are fixed, meaning their biggest recurring expense is immune to inflation. If you are looking to buy or rent now, there’s nowhere to hide from inflation when it comes to housing costs. The good news is that the tight labor market means it’s a great time to move somewhere more affordable. Chances are good that no matter where you go, you’ll be able to find a new job relatively quickly.”
Rent-price increases outpaced mortgage payment increases for new homebuyers in 19 of the 50 largest metro areas in the U.S. during November.
Rents are Up Over 30% In Many Major Metro Areas
The 10 metro areas with the biggest increases in rent prices—up 28% year over year or more—were almost exclusively in Florida and New York. The exception is Austin, TX where rents were up 30%.
Top 10 Metro Areas With Fastest-Rising Rents Year Over Year
- Miami, FL (35%)
- Fort Lauderdale, FL (35%)
- West Palm Beach, FL (35%)
- New York, NY (34%)
- Newark, NJ (34%)
- Nassau County, NY (34%)
- New Brunswick, NJ (34%)
- Jacksonville, FL (33%)
- Austin, TX (30%)
- Tampa, FL (28%)
Only Kansas City & St. Louis saw rents decline year over year
- Kansas City, MO (-2.3%)
- St. Louis, MO (-0.3%)
Only two metro areas saw a decrease in rent in November compared to a year earlier: Rents fell 2% in Kansas City, MO and less than 1% in St. Louis, MO.
To read the full report, including metro-level data and additional commentary, please visit: https://www.redfin.com/news/redfin-rental-report-rents-up-21-pct/
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country’s #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.
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