Increasing demand across the board has caused one, two, and three-bedroom apartment rent growth up by 3.3% in April 2018 compared to prices in April 2017, according to a new report from RentCafe.
With a 6% increase over the year, Las Vega rents rose the most among the largest U.S. cities, reaching $979/month in April, as the local housing market is rebounding.
Denver, Phoenix also lead rent growth
Denver remains one of the hottest cities for renters in the U.S., with apartments renting for $1,559/month, 5.8% more expensive than they were one year prior. Rental housing in Detroit is making a comeback after years in the slump. Apartments in Detroit saw the third highest yearly increase in prices among big cities, 5.4%, reaching just $1,015/month, still well below the national average.
Also poised for an active rental season are Phoenix and San Diego, with 5% and 4.6% year-over-year increases in April.
Jacksonville, Charlotte, Los Angeles and Houston apartment rents rose by more than 4%, while Columbus, Fort Worth, Dallas and Seattle rents were more moderate, between 3-4%.
Sacramento still hot in rent growth but cooling slightly
Rent growth in Sacramento was by 7.2% as of last month, cooled down to 6% in April, but still the highest year over year increase among mid-sized cities, stopping just shy of $1,300/month.
Stockton, CA’s more affordable rental housing is also heated, with a year over year growth of 5.8%, and an average rent $1,100 per month, which is low by California standards.
Key drivers in rent growth
“Housing supply, rent stabilization, and affordable rents are of critical interest nationwide,” Doug Ressler, Yardi Matrix Director of Business Intelligence, said in a release. “In California growing financial pressure on tenants is driving a statewide initiative for a November referendum to lift California’s limits on rent control known as Costa Hawkins.
“Continued rent activity is expected specifically in 22 states and the District of Columbia which have built too little housing to keep up with economic growth in the 15 years since 2000, and have resulted in a total shortage of 7.3 million units, based on research by Up for Growth National Coalition. A key driver in the changing rental markets will be the individual or families’ cost of living and the percentage required for housing,” Ressler said.
Summary of rent growth
- Large cities: Las Vegas sees the fastest increasing rents Y-o-Y (6.0%), followed by Denver (5.8%) and Detroit (5.4%). Apartment prices in Brooklyn and Manhattan continue to slide, while rents in Washington, D.C., Portland, and Austin have been steady, growing by less than 1.5%.
- Mid-size cities: Rents in Sacramento cooled down to 6%, but still lead. At the other end of the spectrum are New Orleans (-2.2%), Tulsa (0.5%), and Wichita (1.0%), where rents are growing the slowest.
- Small cities see the top 20 most significant rent increases in April. Rents in the Midland-Odessa area skyrocketed for another month, 35.6% and 32.6% respectively. At the bottom of the list sit Norman (-2.5%), Lubbock (-2.5%), and Alexandria (-1.1%).
- No significant fluctuation in prices was noticed in Chicago, Philadelphia, and San Francisco, where apartment rents grew slower than 2% over the year, although that may change in the upcoming months as activity starts to pick up.
RENTCafe is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the United States. To compile this report, RENTCafe’s research team analyzed rent data across the 250 cities in the US. The report is exclusively based on apartment data related to buildings containing 50 or more units. Our report includes cities with populations over 100,000 and a rental stock of at least 2,900 apartments in 50+ unit buildings.In this report, large cities are cities with a population of 600,000 people or more, mid-sized cities are cities with a population between 300,000 and 600,000, and small cities are cities with a population of less than 300,000. Rent data was provided by Yardi Matrix, a business development and asset management tool for brokers, sponsors, banks and equity sources underwriting investments in the multifamily, office, industrial and self-storage sectors. Rental rate coverage is for Market Rate properties only. Fully Affordable properties are not included in the Yardi Matrix rental surveys and are not reported in rental rate averages.