Rents Stay Flat In Large Cities As Mid-Sized Cities See Growth

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Rents Stay Flat In Large Cities As Mid-Sized Cities See Growth

Increases in national rents have flattened for the last four months and observers are witnessing the slowest annual growth rate in six years, according to a new report from Rent Café.

The rental market is cooling down, with a 2.2 percent year-over-year increase, with the national rent at $1,354 in September, according to Yardi Marix.

Prime summer season did not show growth in rents

"The housing market follows a cyclical path. The fact that the prime summer seasonality did not cause significant rental growth is the latest signal that the market may be cooling,”    Doug Ressler, senior analyst at Yardi Matrix, a sister division of RENTCafé, said in the release.

“However, these changes will be felt gradually, first in the largest and most expensive cities, followed by mid-sized markets, and eventually trickling down to smaller towns." Ressler said.

On a city-level, most of the notoriously expensive markets have come to a full stop, but the pressure is growing now on smaller or mid-sized cities. Highlights from the report:

Fastest growing rents in the West

  • Odessa and Midland used to be the place to go to for tenants looking for cheaper lifestyles than in Texas' big hubs, but this may not hold true for long. Both cities boast double-digit growth rates, 24.7% and 20.7% respectively, since last year, as the oil and gas economy there is coming back.
  • The rest of the fastest growing rents list is dominated by West Coast cities like Lancaster, CA (11.9%), Reno, NV (11%), and Kent, WA (8.8%).
  • Six cities in Texas had the biggest rent drops in the nation, with the communities outside of Hurricane Harvey’s reach looking at the most significant decreases.
  •  Lubbock and Round Rock lead the way with a 3.4% rent decline y-o-y, mostly due to the apartment developments in those areas.
  • Most of the nation's priciest rental markets, like Manhattan, San Francisco, and Boston managed to keep prices in check this rental season with no changes month over month. However, some of them showed significant y-o-y increases between 2.6% and 5.6%.
  •  Rents in Sunnyvale, Santa Clara, and San Jose climbed since 2016, warning renters in Silicon Valley not to expect major changes despite the apparent stagnation this peak season.
  • In demand one- and two-bedroom apartments are seeing rent increases close to 3%, while the average rent for a studio only went up by 1.9% compared to last year.

Cites with the fastest growing rents

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