Rent prices are continuing to rebound with the national index up by 1.9 percent month-over-month in April, “the biggest monthly jump in our national index since the start of our estimates in 2017, breaking a record set just last month,” said Rob Warnock, senior research associate with Apartment List.
Rent growth has now been outpacing prior-year averages for several months, “indicating that this year’s moving season is set to be a historically busy one,” Apartment List says in the report.
“For comparison, in the pre-pandemic years of 2018 and 2019, month-over-month rent growth in March was 0.8 percent and 0.7 percent, respectively. This month’s sharp increase breaks a record set just last month, when rents jumped by 1.4 percent. In each of the past four months, our national index has not only had positive growth, but has outpaced the average growth of prior years.
“After the rapid growth of recent months, year-over-year rent growth now stands at 2.3 percent, in line with the rates from prior years,” Apartment List says in the report.
Days of plummeting rent prices have come to an end
“The data continues to show significant regional variation, but the days of plummeting rents in pricey coastal markets have come to an end.
“The cities with the sharpest year-over-year rent declines are now experiencing positive rent growth again, and in some cases, prices are rapidly rebounding. At the other end of the spectrum, many of the mid-sized markets that have seen rents grow quickly through the pandemic are continuing to boom,” Warnock says in the report.
In markets like San Francisco where rents had been falling fastest, prices have turned a corner and are now rebounding.
At the same time, booming markets like Boise continue to see prices climb. More broadly, as vaccine distribution continues to gain momentum, we may be starting to experience the release of pent-up demand from renters who had been delaying moves due to the pandemic. Whereas last year’s peak moving season was halted by the pandemic, this year’s seasonal spike appears to be making up for lost time.
“We are now seeing that the markets where rents had been falling sharply have turned a corner, and in some cases, prices in these cities have started to rebound rapidly. But although some may be moving back to superstar cities, affordable mid-sized markets are continuing to boom. As vaccine distribution continues to gain momentum, rental markets may be beginning to reflect the preferences of a post-COVID future,” Apartment List says in the report.