Renters can take solace that landlords are not increasing rent in large increments today, however rents remain high and unlikely to fall anytime soon. According to a CNBC report, several unexpected markets are heating up, while some hot ones are cooling off. Austin, Texas, for example, is one of the most affordable rental markets in the nation, even though home prices there are rising fast, according to a new study by AppFolio, an apartment management company that commissioned data from real estate research firm Axiometrics.
The most affordable city for apartment renters, according to the study is Las Vegas. Nathaniel Kunes, vice-president of product development at AppFolio, noted that cities rounding out the top five cheapest markets are Indianapolis, Phoenix and Atlanta.
“Supply is finally catching up with demand in many markets, so rent growth is starting to slow. It took a few years extra after the recession to get to this point because during the recession construction effectively stopped, while renter demand was still growing.”
Renters will have to open their checkbooks to live in New York and Miami, described in the survey as the most “rent-burdened” cities in the nation. Residents there pay more than half of their monthly incomes on housing alone. Boston, Los Angeles and San Francisco round out the worst market’s for rental affordability. It shouldn’t be surprising these markets are expensive, but Kunes notes that rents surprisingly are heating up in the Midwest.
“The Midwest is hot right now because it is one of the few markets where rent prices had been dropping. This was due to job loss and oversupply for the last few years in this market.”
One example is Minneapolis-St. Paul. The Twin Cities is seeing 4 percent rent growth, twice the growth of Miami rents. Indianapolis is another Midwest hot spot, with rents rising more rapidly than Boston. Kunes said there is one big factor.
“People are migrating back into the Midwest and jobs are coming back. Rents are still quite affordable in the Midwest compared to the rest of the country.”