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The average rent for an apartment in the United States rose to $ 2,000 a month for the first time in history, up 15% from May 2021 to a record $ 2,002 in May this year. The highest prices are in New York, where the average rent is $ 4,008, in Boston – where potential tenants have to pay $ 3,970 a month out of pocket, and in Anaheim, California, which has an average rent. of $ 3,400.
A new report published by Redfi, quoted by G4Media, shows that nationally listed rents in the United States for available apartments increased by 15% in May from a year ago and by 2% in April.
Rents increased by more than 30% in Seattle and Cincinnati, while in Miami, West Palm Beach and Fort Lauderdale (all in Florida), rents rose 29%. Even in previously affordable cities such as Nashville, the average rent is now $ 2,140, up 32% from last year.
The top ten cities with the highest growth include:
1. Austin, TX (48%)
2. Nashville, TN (32%)
3. Seattle, WA (32%)
4. Cincinnati, OH (32%)
5. Miami, FL (29%)
6. Fort Lauderdale, FL (29%)
7. West Palm Beach, FL (29%)
8. New York, NY (24%)
9. Nassau County, NY (24%)
10. New Brunswick, NJ (24%)
According to statistics, only three of the 50 most populous metropolitan areas in the United States saw a decline in rents in May 2022 compared to May 2021. Rents fell 10% in Milwaukee and 3% in Kansas City and Minneapolis. Redfin noted that the same three metropolitan areas had seen a drop in rents in April this year as well.
According to the real estate company, the average prices for renting apartments reached $ 4,008 in New York, as well as in Newark and New Brusnick (both in New Jersey), $ 3,970 in Boston, $ 3,752 in Oakland and San Francisco, 3,400 dollars in Los Angeles (all California cities), while in Miami, Fort Laurdeale and West Palm Beach (Florida) the average rental price is currently $ 3,157.
“More people are choosing to live alone, and rising mortgage interest rates are forcing potential homebuyers to continue renting,” Redfin Deputy Chief Economist Taylor Marr said in a statement. more than 20,000 apartments in America’s 50 largest metropolitan areas. “These are among the pressures on demand that keep rents high. While renting has become more expensive, it is now more attractive than buying for many Americans this year, as mortgage payments have outpaced rents for many homes. Although we expect the increase in rent to continue to fall in the coming months, it is likely to remain high, causing continued accessibility problems for tenants. ”
NPR presented the case of Kim Drotar, a teacher at a public school who rents an apartment in St. Louis. Drotar is a single mother with a daughter in the 5th grade. She tried to find a house she could afford to buy.
“I just want a place where my daughter can ride a bike and make friends with her neighbors and play with the kids, and they can come to us,” said the woman, who spoke about her problems with her current neighbors. .
But when it comes to bidding, Dotar continues to lose home bidding to bidders. And now, with rising mortgage rates, she says her chances of buying are completely eliminated. Meanwhile, renting an apartment has become increasingly difficult to afford. “My rent is up 22% this year,” she said. “It’s getting harder and harder to save more for an advance to buy.”
“Housing is becoming less affordable for everyone at every level,” said Daryl Fairweather, Redfin’s chief economist. She said that since the last real estate crash, not enough buildings have been built for a decade. And this housing shortage is the biggest driving force behind rising house prices and preventing ordinary Americans, such as Kim Drotar, from affording to buy a home.
Fairweather said builders built fewer houses in the 2010-2020 decade than in any 10-year period since the 1960s. “So I think it will take at least another decade to get us out of this hole.” The economist says changing zoning laws to allow the construction of smaller, more affordable homes built closer together would help.
Meanwhile, the fact that more people are forced to rent even if they prefer to own a home helps keep demand and prices high in the rental market as well.
“Rents are rising as fast as house prices,” Fairweather said.
According to the NPR, government consumer price data show that the average rent that Americans actually pay – not just the change in price for new listings – has risen by 4.8% in the last year, which is a higher growth rate than usually.
The growing demand for rental housing from people who prefer to buy a home is expected to continue. Home loan applications are 21% lower than a year ago, as rising interest rates continue to drive more potential home buyers out of the market.
The Redfin report came just a day before the U.S. Department of Labor revealed that U.S. prices had risen more than analysts had expected last month as rising energy and food costs pushed inflation higher. rate after 1981.
Thus, the annual inflation rate rose to 8.6% in May, from 8.3% in the previous month, the Labor Department said on Friday. Food prices rose by more than 10% last month compared to May 2021, while energy costs rose by more than 34%.
The report released on Friday indicated that growth continues to spread across the US economy, pushing up costs for everything from plane tickets and clothing to medical services, rent and fuel. During the month, prices rose by 1%, driven by rising gasoline prices, which hit new highs in the United States, approaching an average of nearly $ 5 per gallon.
“Even if inflation peaks soon, it is unlikely to decelerate quickly,” said Richard Flynn, CEO of Charles Schwab UK. “High prices can put pressure on consumer spending in the medium term. Add to the threat of inflation and supply chain problems and the economic impact of Russia’s invasion of Ukraine, and it’s easy to see why fears of a recession have soared. “