The national rent index is up by 0.7 percent month-over-month, representing the second straight month of positive rent price growth and the largest monthly increase since June 2019 when the market was in the middle of the summer boom, according to the Apartment List national monthly report.
“This month’s data represents the clearest indication yet that rent prices are rebounding in markets across the country,” Apartment List said in the report. “For comparison, in the previous three years, the average month-over-month rent growth in February was 0.3 percent. In other words, the month’s increase was more than double the prior-year average for this time of year.
“The data continue to exhibit significant regional variation, but the days of plummeting rents in pricey coastal markets appear to be coming to an end, with cities such as San Francisco and Seattle experiencing positive month-over-month growth for the first time since the start of the pandemic.”
The rent index report says the latest month appears to be the month where steep rent declines are bottoming out, but booming markets are continuing to see prices climb, such as many of the mid-sized markets that have seen rents grow rapidly through the pandemic, showing that there’s still steam left in the current boom.
Big Cities with Sharp Rent Declines Show Positive Growth
Nine of the 10 cities with the sharpest year-over-year rent declines experienced positive rent price growth this month, the Apartment List rent index report shows.
For five of these cities, this was the first monthly increase since the start of the pandemic, while the other four are continuing a trend that began last month. In Boston, rents jumped by 3 percent month-over-month, the largest increase among the nation’s 100 largest cities. New York City is the only market on this list where rents continued to fall this month, but even there, the decline was just 0.1 percent, compared to an average monthly decline of 2.4 percent in the preceding nine months.
Rent Index Conclusion
“Since the start of the COVID-19 pandemic, we have witnessed significant disruptions to rental markets across the country. Social distancing and remote work changed what people want in a home, while many renters were thrust into immediate and unexpected financial hardship as layoffs and furloughs rippled through the economy.
“These sudden changes to budgets and preferences led to a convergence in rental prices across the U.S. – the most expensive markets saw rents fall rapidly while a number of more affordable mid-sized cities experienced accelerating rent growth.
“This month’s data indicates that the markets where rents have been falling rapidly have reached a turning point. The booming markets are still seeing prices rise, but in many cases, that growth is flattening somewhat. While remote work and economic fallout of the pandemic will undoubtedly continue to impact local rental markets going forward, the way that these trends continue to play out may now start to become more nuanced and gradual,” Apartment List said in the report