US Rents Surge To Record Highs Led By Small-Town Texas Oil-Boom

After climbing roughly 1% in June, the national average rent in the US reached yet another record high as rents in small and mid-sized cities continued to outpace their larger peers. But while prices in Midland, Texas and Odessa, Texas led the pack as rising oil prices revived the fortunes of the US energy industry, the usual suspects continued to occupy the top spots, with Manhattan and San Francisco remaining the two most expensive rental markets in the country, according to RentCafe's latest monthly rent report.

RentCafe

Here are a few takeaways from the June report, courtesy of RentCafe:

  • The national average rent reached the all-time high of $1,405 in June 2018, having increased by 2.9 percent year over year, and by 0.9 percent ($12) month over month, according to Yardi Matrix data.

  • Rents increased in 88 percent of the nation’s biggest 250 cities in June, remained unchanged in 10 percent of cities, and dropped in 2 percent of them compared to June 2017.

  • The top 20 fastest increases in the country were registered in small cities, where population migration and the strengthening economy are accelerating rent growth.

  • Manhattan has had the largest year-over-year rent increase of the past 12 months, June having brought a 1.5% increase after a year-long period of decreasing or stagnating prices.

With more families renting today than in years past (as home valuations make ownership out of reach for all but the middle-class and the wealthy, two- and three-bedroom apartments and homes have been the primary drivers of rent growth so far in 2018. However, June's increases were almost perfectly balanced as rents in one-bedroom and studio apartments caught up to two- and three-bedroom

The thriving oil-industry hubs of the Permian Basin, Midland and Odessa have been leading the nation with rents growing at a spectacular rate since the last significant drop in oil prices.

The latest data shows a 40% increase in Midland compared to June 2017, whereas Odessa rents have increased by 36.6% on average in the same period. Lancaster, California enters the top 5, where rents have seen an alarming 10.2% growth rate over the past 12 months. The 9.9% rent increase in Reno, NV means The Biggest Little City in the World has maintained the its position from last month, when it had posted a 10.7% gain. The Phoenix suburb of Peoria, AZ climbs to 5th place, registering a 9.6% Y-o-Y increase in rents.

Small

When it comes to larger cities, Las Vegas again claimed the title of the fastest growing in that category, with rents rising 7% year-over-year.

Rent

Among mid-sized cities, Tampa, Fla. took home the title of fastest-growing rents in June, while three mid-sized California cities - Sacramento, Stockton and Fresno - all made it in the top five fastest growing.

Midsized

And with the stock of available homes on the market continuing to lag demand, it's likely home valuations - and by extension, rents - will continue to climb until the already expensive rents and home prices rise beyond the means of the average renter or marginal buyer, a phenomenon that's already beginning to play out in the most expensive markets.

Comments

DoctorFix algol_dog Sun, 07/08/2018 - 03:10 Permalink

It's always been that way.  But imagine 1973 and how it was then!  I do... and coming from southern cali to Midland was a.culture shock to say the least.  My mom cried like there was no tomorrow but we were able to survive there wehere in Cali it wasnt possible.  And my dad actually worked hard and long to pay off the house.  Boring as hell but back then it was better than nothing.

In reply to by algol_dog

just the tip Sat, 07/07/2018 - 22:01 Permalink

apartments do not have testicles.  they neither float, fuck, or fly. 

but renting an apartment in midland/odessa at present is not so bad.

six months from now ZH will post an article US Rents Fall To Record Lows Led By Small-Town Texas Oil-Boom.

and those elevated rents are limited by the lease agreement.

the oilfield employees will work as much overtime as they can.

"you need me for a 24 hour shift?  no fucking problem."

Endgame Napoleon Snout the First Sun, 07/08/2018 - 07:29 Permalink

Good thing you are a “we,” because when you are single and childless, that rent amount would often be your ENTIRE paycheck or more than your entire paycheck. There is NO good or even possible rental option for millions of citizens, but the important thing is more womb-productive migration, driving rent prices even higher as jobs become even more scarce, with even more citizens out of the workforce.

The SCOTUS nominee will probably settle the magnet that provides an anchor, sucking legal / illegal migrants into the US by granting many access to mounds of monthly welfare and progressive-tax-code cash up to $6,431 that eliminates their major household expenses: the instant citizenship that birthright citizenship gives their US-born kids. That is how they get the welfare.

On sites like Breitbart, the comment lines clearly show the number of people who put immigration first, with even making fun of Maxine Waters second to it sometimes. It is the serious issue that commands the biggest public response. 

If Republicans do not do something real to stop the wage-crushing, rent-raising flow of legal / illegal, womb-productive immigrants who can afford to work for beans by staying under the income limits for welfare, keeping their traceable earnings low and likewise driving up the already too-******-high price of rent, the migration away from the Republicans may be larger than expected. There are signs that it is. 

In reply to by Snout the First

Number 9 Sat, 07/07/2018 - 22:14 Permalink

time to go all south of the border and everyone live together in the storage unit..

if the rent dont kill you the ever upward march of power water sewer garbage will..

getting fvkn ridiculous 

JibjeResearch Sat, 07/07/2018 - 22:52 Permalink

Corporations are sucking on renters' blood. 

As always, the poor gets poorer.  They just find a way to get poorer.

Their thinking process is completely different than a business thinker.

Schooey Sat, 07/07/2018 - 22:58 Permalink

Someone is going to pay $3200 per month for a 1000 sq. ft. (more like 800) in North Brooklyn soon. I hate to think that one escape will lead to someone else being exploited. But what can one do? One must get out. 

hotrod Sat, 07/07/2018 - 23:10 Permalink

Better to buy, now that nothing down mortgages are back.  Have a family member getting one now.  Couldn't believe it when he excitingly said nothing down.  UNREAL

dirty fingernails hotrod Sat, 07/07/2018 - 23:41 Permalink

I'd rather pay 20% down and have realistic prices over no money down at what might be the peak. NAR said it housing flatlined last month. Prices are coming down here but stuff is still going quick. Not a frothy as it was 2 months ago when houses here were selling hours after listing. 

Farm land here has gone from 3500/ac to 9600/ac in the last 10 years.

In reply to by hotrod

XBroker1 Sat, 07/07/2018 - 23:34 Permalink

This looks like the last bubble. Single family homes are under attack by fire and man made 'natural' disasters. You'll be in the Agenda 21 kill grid stack & pack in no time. Single family homes won't go down in price, overall. The insurance & other things will get extremely high after all of the fire claims etc.

If one or more hurricanes hit FL this year, they'll see another nice bump in already insane insurance rates. Guy that bought my modest 1200 sf bachelor pad in FL 2 years ago is paying 3 to 400 per month just for insurance.

abgary1 Sun, 07/08/2018 - 16:39 Permalink

A similar boom should be happening in Canada but the Socialists have driven all investment out the energy sector with their Green policies.

 

Thanks for nothing Jihadi Justine Turdeau, Ratchel Nutley, John Whoregan and Andrew Wiener Weaver.

Canada is Socialist shithole run by Socialist shitheads.