Rents Increase In 89% Of Largest US Cities

The number of US renters is growing much more rapidly than the number of homeowners, so it shouldn't come as a surprise that rents in the vast majority of American cities climbed again last month - continuing a trend that has largely persisted since the financial crisis, according to data compiled by RentCafe, a website that provides rental listings nationwide. RentCafe occasionally analyzes the reams of data it collects to provide insightful clues about the US housing market. And as markets puked following a robust headline increase in average hourly earnings - one of the first signs that stagnant consumer prices might once again rise - RC's latest report shows that the national average rent was $1,361, 2.8% higher than this time last year, but flat on a monthly basis.

Nearly 90% of the nation’s biggest cities have seen rents grow in January; in 9% of cities rents remained unchanged, while only 2% experienced price declines...

Contrary to the conventional wisdom, it was actually America's smaller cities that saw the greatest increases (to be sure, that's probably because markets like San Francisco are already well past the boundaries of what typical middle-class workers can afford). These markets include Gilbert, AZ rose 8.5%, Roseville, CA (8.5%), and Fort Collins, CO (7.9%) breaking the top 10.

Meanwhile, in a sign that some of the hottest housing markets in the country are starting to buckle under the weight of overdevelopment, RC found that the only major market where rents dropped year-over-year was Brooklyn, where rents decreased by 14%.

Read RentCafe's entire report below:

The price of apartments has gone up in 89% of the nation’s 250 largest cities in January 2018, as demand for rentals remains elevated throughout the country, sustained by an improving economy and low unemployment. Renters continue to embrace apartment life, as rent prices are increasing at a strong and steady annual rate of 2.8%, nationwide, reaching $1,361/month in January 2018.

The price of two-bedroom units is increasing the fastest

One and two-bedroom apartments remain the most in-demand apartment sizes in the U.S. The price of two-bedroom rentals has climbed the most over the year, with a 3.5% increase in rates, exceeding $1,400/month on average, while the price for one-bedroom units has increased by 3.4%, renting for $1,225/month on average in January. The slowest growing apartment type in January were studio apartments, renting for 2.5% more than this time last year.

 

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Rents in 6 cities, including Brooklyn, NY, continue to slide

In only six cities out of the 250 studied are rents cheaper than they were one year ago. With a large new inventory of apartments to fill, the rental market in Lubbock, TX has seen the biggest drop in prices year over year, -6.3%, with an average apartment now renting for less than $900/month. Norman, OK is also seeing a slight decrease in the average rent (-2.3%), as a result of thousands of new apartments hitting the market in just the past few years, with an average rent of $861/month as of January 2018.

Diminished demand for housing has affected prices in McAllen, TX, which have declined by -2.2% year-over-year. Rents in Kansas City, KS and Baton Rouge, LA are also sliding slightly this month, by less than 2%. The only large market to see a decrease in rents is Brooklyn, NY, which had wrapped up last year -1.7% below the previous year’s levels, maintaining the downward direction in January as well, with rents down by -1.1% year over year.

U.S. Cities Where Rents Decreased Y-o-Y in January 2018

 

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Three new cities break the top 10 with greatest rent increases

At the beginning of the year, we have three new cities entering the top 10 for fastest growing rents in the U.S. Fueled by increasing demand, Gilbert, AZ (8.5%), Roseville, CA (8.5%) and Fort Collins, CO (7.9%) saw big rent bumps over the past year. Rental prices in Gilbert, AZ are rising fast, clocking in at $1,156/month in January, as its population has been growing at extremely high rates, demand for housing has skyrocketed, and a big portion of the Gilbert population is renting.

Sacramento Metropolitan Area’s City of Roseville is joining Sacramento — where apartment prices have been on a steep climb for a while now — as one of the top 10 cities in the country with the fastest rising rents. The price of apartments in Roseville, CA has jumped by as much as 8.5% year-over-year, with the average rent currently exceeding $1,600/month. Fort Collins, CO has also become one of the country’s fastest growing rental markets, with residents and Colorado State students competing for a limited number of rental apartments. Rates are up almost 8% from the same time last year, a Fort Collins rental apartment costing on average $1,436/month at the moment.

Oil centers Odessa and Midland, TX are still at the top of the list with the highest rent rebounds over the year, 35% and 31.4% respectively. Buffalo, NY (12.1%) and Lancaster, CA (10.2%) also struggling with double-digit price hikes year-over-year.

U.S. Cities with the Fastest Growing Rents in January 2018

 

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The most expensive California rents push the limits again in January

The priciest cities for renters remain big urban job centers on both coasts, with Manhattan, NY at the top of the list with an average apartment rent of $4,079, unchanged from the previous month and down slightly by -1% over the year.

If renters living in The Golden State where hoping for a respite from high rents in the new year, they’re not getting it yet. Prices went up again in January in all 5 California cities in the top 10 most expensive for renters, with the highest rates in the state being in San Francisco, $3,448/month. Jersey City apartments, the sixth most expensive in the U.S., also saw increased rates this month, reaching $2,855.

Wichita, KS, Tulsa, OK, and Toledo, OH remain the country’s top 3 most affordable cities for renters, alongside 7 other Midwestern and Texan towns where average rents do not exceed $730/month, a fraction of the prices in coastal cities. In fact, things have been quiet in these parts of the country, as rents remained flat or grew slower than the national average in 9 out of 10 cities. Fort Wayne, IN was the only one to see a significant jump in prices for the year, 4.5%

 

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At the start of the new year, rents are expected to continue rising throughout the country slightly above inflation, as demand for apartments remains strong from all generations of renters. Doug Ressler, senior analyst at Yardi Matrix, offered his opinion as to what renters can expect as we begin a new year:

You can find the average rent in your city at RentCafe.

 

Comments

LetThemEatRand Tue, 02/06/2018 - 19:55 Permalink

"rents are expected to continue rising throughout the country slightly above inflation"

Bears repeating how ridiculous it is that the cost of buying a home is not included in official inflation figures.

MK ULTRA Alpha lester1 Tue, 02/06/2018 - 20:28 Permalink

It was too much when Yellen stated the Fed can no longer find inflation. The statistical data has been politically massaged until it has no meaning. 

Yellen was using the we can't find inflation as an excuse not to raise rates. She was a labor economist which believed the higher employment would increase inflation. This was called the Phillips curve, an obsolete metric,  when applied to global economics. In order to make the Phillip's curve work, it would have to be applied to the global economy.

Maybe up until the 80's, global trade and inflation could use a labor model to explain increased inflation, but the US has been hollowed out of the high paying jobs, and imports a substantial amount of consumer goods, thus, labor has less and less influence on prices.

So we had inflation long before Yellen said, she couldn't find inflation. Inflation has been cooked into the US economy from QE1, QE2, and QE3. Yellen should have started raising rates and selling off the Fed balance sheet three years ago. She kept the status quo to make the left look good and their communist leader Obama propped up.

Funny how the brainwashed TV heads can't accept Yellen crashed the markets after being a national cheerleader for the market, nothing to fear, nothing bad, no bubble etc. at the last minute in support of Greenspan and Katz, she changes her assessment abruptly. In the end, she was the cheerleader for crashing the market. These three signaled and the market came down. But it didn't go as far down as they were trying to crash it.

In reply to by lester1

TeethVillage88s Tue, 02/06/2018 - 20:00 Permalink

ZH? If Headline is correct seems like long time coming to me.  What do you think?

- Federal Reserve is biggest holder of MBS (Mortgages)

- Hedge Funds are big time owners of US Mortgages/Housing

- Foreigners are open to buy all our Housing from Sub-Prime to Pimeir

- Central Banks world Wide could buy US Housing

- Dumbest Sunn-of-a-bitch can buy into Tracts of US Housing

- US Congress are the Dumbest Sunn-of-a-Bitches

- Homeless Rates have rises, Citizen Bread Winner Jobs have been replaced

- US Assets, Resources, natural Resources, and Consumer Debts are sold to Foreigners... few limits

- US Financial Markets are open to Crashes from Communists, Fascists, Chines, Japanese, Taiwanese, Sudanese, Hindunese

TeethVillage88s MK ULTRA Alpha Tue, 02/06/2018 - 21:02 Permalink

Timeline:

1930 - creation of BIS to ease foreign exchange rates for German Reparations?
1933 - decoupled from domestic gold standard,
1933 - Securities Act of 1933 and the Glass-Steagall Act (GSA),
1939 - 1945 World War II
1944 - Bretton Woods Conference (United Nations Monetary and Financial Conference)(to regulate the international monetary and financial order)
1944 - creation of International Bank for Reconstruction and Development (IBRD)(World Bank).
1944 - creation of IMF,
1944 - End of Protectionism of US Farms & Industry
1956 - Bank Holding Company Act of 1956 (BHCA)
1963 - 1974 US-Vietnam War coupled with federal budget problems, Gold Standard,
1970s - "Big Three" Auditing Agencies Fitch Group, S&P's, Moody's regulate banks
1971 - Smithsonian Agreement, decoupled USD from international gold standard,
1985 - Plaza Accord
1987 - Louvre Accord

War on Jobs

1980 - Most favored Nation Status for China (J. Carter)
1984 - Caribbean Basin Initiative,
1994 - WTO Formed, Marrakech Agreement
1994 - War on Jobs, NAFTA,
1994 - Most Favored Nation Status for China Reinstated after Tianamen Square
1996 - Most Favored Nation Status for China Reinstated after Test
2000 - Permanent Normal Trade Relations with China and WTO Membership for China
2005 - CAFTA-DR Ratified, 2006

1989 - Globalism Rules Described in Washington DC, by English Economist, John Williamson

In reply to by MK ULTRA Alpha

Scanderbeg Tue, 02/06/2018 - 20:25 Permalink

Neo-liberal, Fuedal, Weimerica. Where hipster serfs spend half of more of their income to rent tiny shitboxes in overcrowded, filthy, urban cesspools.

nsurf9 Tue, 02/06/2018 - 20:41 Permalink

It's always difficult to find a heard of elephants when you're wearing a microscope for glasses.

Well hey!  If there's no wage inflation - you can print trillions of $ to give to your special friends.  You see, that way real estate prices and rents can go to the moon - and you never have to worry, even a little, that everyone is living in the streets. 

Umh Tue, 02/06/2018 - 20:47 Permalink

Supply and demand folks, illegal immigrants have to live somewhere. They cause wages to be lower and rents to be higher.

alter_ Tue, 02/06/2018 - 22:33 Permalink

Rent increased in 89% of cities?! But the conventional Millennial wisdom is that renting is a far better deal than buying....And everyone knows Millennials are so smart with money....

 

Tom Green Swedish Tue, 02/06/2018 - 23:05 Permalink

Seriously why would anybody rent? Their is no incentive to it. Its like throwing money away. No tax break no nothing unless you call it a home office, which most people should be doing. Sell shit on any online platform for a loss and say the rental property is your "office". Its like a living in a cheap hotel room. Retarded. Everybody should be allowed to have a house. Rental income should be BANNED. 

To Hell In A H… Wed, 02/07/2018 - 04:53 Permalink

The problem of rising rents is far deeper than what is being portrayed. Like most social changes, these changes are incremental, then they become the norm and it started off with the Polish immigrants first. Like any immigrant community, they settled down where the rents were cheapest, until they are financially able to move on. This meant they settled in predominantly black areas, but they bought a new style of living.

These eastern Europeans were renting a 4 bedroom house, where 10-12 Poles would live in it. It took the Landlord community around 4-5 years for us to get on top of this problem. The amount of eastern Europeans I’ve had to evict due to over-crowding, breaking their tenancy agreement and causing issues with their neighbours made me very careful who I rented to coming from this group.

Alas, what we didn’t notice was the beginning of a trend, instead of just blaming the Eastern Europeans and calling them scumbags, we were witnessing the beginning of the multiple occupancy trend going viral. After explaining to the Eastern European immigrants how you should not live 10 and 12 to a house, there was a shift by landlords into allowing couples to rent a double room and hence the massive explosion in London of living in shared accommodation. This took place for 2 reasons, out of necessity and ultimately because it made us landlords more money.

Sharing a house use to be the exclusively for students, a group of friends, the dirt poor and bail hostels/shelters. Not anymore. A double room in an average part of London is now £650 PCM and when I say average, I mean predominantly black areas. That should tell anybody how expensive housing has got in London.

Instead of taking £1400 PCM 10-12 years ago, when this phenomena first started, we were renting each room out for roughly £400 PCM, making us an extra £200 PCM per month. Today we charge £650-700 PCM for a double room. Today a 4 bedroom house is turned into 6 bedrooms. The living room and the dining room are now turned into bedrooms, making the house now a 6 bedroom, where the occupants share a kitchen and the bathroom like student accommodation. 6 x £650 is just shy of £4K per month, then the UK government and talking heads pays lip service to gentrification, while staying the course and making things worse. I have over 30 properties, not all paid off yet.

What is the cure? Build more social housing. That will put a brake on rent increases, as it historically did. Oh no, we can’t do that. The value of my house won’t go up as fast, so say the NIMBY’s. Now you know why there are so many £65K Range Rovers on our road and people wonder how we can afford it. Landlords are the ultimate rent seekers. Alas the free-market ideologues live in a world of theory and defend people like me. As for the Trickle-Down-Effect? lol  Only in my immediate family and close friends. I know what scalping is, because I do it on a monthly basis. This April, I’m going to charge a minimum of £700 PCM for a double room, because that is now the going rate in North London inside the North Circular. Rents going higher? "The markets will bring rents down if left alone is the mantra"  Jesus Christ......

Let it Go Wed, 02/07/2018 - 07:32 Permalink

Fort Wayne, Ind. recently announced another incestuous boondoggle to be built using government money in a part of the city where few people want to live. Ironically I found out about this project on the very day that I had just read an article about the 10 most and least expensive cities in America to rent an apartment and how Fort Wayne had some of the lowest rents in the country. The article below contains the hard to believe details.

 http://Fort Wayne Boast Of Constructing Another Housing Boondoggle.html