September 8, 2021, Lynn Pollack, GlobeSt.com - Apartment rents across the US increased by 2.1% from July to August—a slight cool-down from 2.5% the month before—but still continuing a trajectory of rent growth that began with a flash at the beginning of the year.
According to a new report from Apartment List, national median rent growth has increased by 13.8% since January, a staggering increase when compared to typical pre-pandemic growth, which averaged around 3.6% from 2017 to 2019.
“With rents rising virtually everywhere, only a few cities remain cheaper than they were pre-pandemic,” the report notes. “And even there, rents are rebounding quickly.”
Consider San Francisco, where rents are still 12% lower than in March 2020. Despite that, the city has posted price increases by 20% since January 2021. But on the other hand, cities like Boise—which has seen rents skyrocket since the onset of the pandemic—are only continuing their meteoric rise. Rents in Boise are up 39% over March 2020 figures, and rent growth this year is outpacing pre-pandemic numbers in 98 of the 100 largest cities in the US. In New York, prices are up 5.8% in August, a faster uptick than anywhere else in the US in a single month, and Los Angeles showed increases of 2.5%.
Rents are still below pandemic levels in San Francisco, Oakland, San Jose, Fremont, Minneapolis, Seattle, Jersey City, and Washington, DC.
Apartment List suggests that the increasing incomes and budgets of renters searching on their database are related to the increasing cost of homeownership and a tight residential real estate market. The for-sale market has posted a 48% drop in listings since last year, with supply seriously constricted.
“This high demand has created a tight market, resulting in our vacancy index dropping sharply throughout 2021 as prices increase rapidly,” the report states. “Rents are now up more than 13% this year, more than doubling the overall rate of inflation.”