The national median rent rose to $ 1,302 in September, up 15% year over year, according to a report from Apartment List, a rental listings website.
After falling for much of 2020, rents are now rising much faster than they were before the pandemic. The national median rent has risen by 16.4% since January. From 2017 to 2019, a more typical rent increase during those months was 3.4%, according to the report.
In September, rents remained below pre-pandemic levels in just five major cities: San Francisco, Oakland and San Jose, California, as well as Minneapolis and Washington, DC.
But the meteoric rise in rents could show signs of a peak.
Boise, Idaho, which saw the largest rental increase during the pandemic – nearly 40% since March 2020 – saw no monthly increase in September. Instead, the report said the median rent in Boise fell 0.1%.
That’s hardly a relief for Boise renters, but according to the Apartment List report, it could be a sign that the market is starting to stabilize.
Rents in the cities of the Sun Belt are increasing
“What is happening now is a massive rebound in rents,” said Anthemos Georgiades, CEO of Zumper, a rental listings website. And much of that recovery rose steadily over the course of 2021, he said.
According to Zumper, rents are rising fastest in Sun Belt cities like Phoenix, where rent for a one-bedroom apartment rose 22% year over year in September.
Nearby, Scottsdale’s median rent rose to $ 1,850 in September, up 23% year over year, according to Zumpers analysis.
According to a report from CoStar Group, a real estate data company owned by Apartments.com, cities in the sunbelt saw the strongest rent increases in the country at the end of summer.
According to the report, rents in this region have been driven higher by a robust economic recovery and influx of newcomers.
“Sun Belt’s markets had good growth before the pandemic and are now the standout ones,” said Jay Lybik, national director of multi-family analytics for the CoStar Group.
Other cities that are seeing rent increases are those that aren’t the largest cities in their area – like Fort Lauderdale, Florida, or San Diego, according to Zumper.
“Maybe people don’t have to live in Miami or Los Angeles, but they still want to be around,” said Georgiades. Nearby cities often offer a lower cost of living, larger square footage, and an attractive lifestyle. “Only a minority will be completely remote in the future. For many people, proximity is a realistic alternative.”
New York and San Francisco are recovering
Rents in the country’s two most expensive markets, New York and San Francisco, have cratered during the pandemic. Now they’re both coming back, with San Francisco lagging a little behind.
The Manhattan borough is warming the most in New York City, said Nancy Wu, an economist at StreetEasy. “Manhattan residents were more mobile and able to move. That’s where we saw the biggest drop in rents. ” [during the pandemic] and the biggest profits back in town. “
Before the pandemic, rents in San Francisco were more expensive than New York and there was less inventory. San Francisco may not be coming back as soon as New York, Wu said, because the Bay Area tech industry may not need as many office workers as the financial firms in Manhattan.
Still, she said, New York and San Francisco have more in common than any other part of the country. “They are different from the Midwestern and Sun Belt cities, which were relatively more affordable and saw strong rental growth.”
In New York, rents are not as high as some analysts thought at the beginning of the summer due to the ongoing threat from Covid-19.
“That leaves the tenants with a lot of good offers,” said Wu. “You can still negotiate.”
The median Manhattan rent in August was $ 3,255, according to a report by real estate broker Douglas Elliman and valuation firm Miller Samuel. That is 1.5% more than in July, but still 3.2% less than in the previous year.
However, according to Jonathan Miller, President and CEO of Miller Samuel, demand is recovering. Even though letting activity was strong at the beginning of autumn, Miller said it was more subdued than expected.
“At the beginning of the summer, there seemed to be a consensus among American companies that personal work would resume in the fall,” Miller said. “This consensus is much more diffuse. Start dates are put in place, often in January and into the new year.”
This uncertainty is evident in rental activity, he said.
“Rather than having that moment, which was supposed to be a light switch, when things got going again in a significant way, it’s less obvious,” Miller said. “Now there is more uncertainty.”