Median rent increased 15.5% y/y in the nation’s top 50 metros.
Rent Highlights in May
The median rent for condos, townhomes, single-family homes, and apartments hit $1,849 in May across the country’s largest metro areas. This $1,849 was a year-over-year increase of +15.5% and represented the highest level of median rent prices in Realtor.com’s rental data history. This price tag also represented the 15th consecutive month of a rent prices hitting a new record high.
Simultaneously, the annual growth rate for rent in May 2022 was the slowest annual growth rate for rents since September 2021. In fact, after rent growth peaked at 17.3% in January 2022, the annual growth rate for rent has declined incrementally ever month during 2022.
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In addition to median rent increasing +15.5% y/y, the cost of living in May outpaced earnings by nearly three times over. The Consumer Price Index grew by 8.6% while average earning for Q1 2022 grew by just 5.2% y/y.
Rents by Unit Size
Studio apartments continued driving rent growth in May. Take a look:
Size Median Rent Rent Y/Y Rent Change – 2 Years
Overall $1,849 +15.5% +23.2%
Studio $1,530 +16.9% +18.8%
1-bed $1,708 +15.2% +22.5%
2-bed $2,076 +14.8% +25.5%
Do Rent Prices Correlate with For-Sale Listing Prices?
The short answer to this question is yes. Why? Because if rent prices were less expensive than making monthly mortgage payments to own that same home, homeowners would likely become renters.
However, there are some exceptions.
The places where rents are higher than listing prices include:
- Miami FL- rent is now $727/month higher
- New York NY – rent is now $575 higher
- Riverside CA – rent is now $556 higher
- Boston MA – rent is now $490 higher
- San Diego CA rent is now $398 higher
Remember that Miami, New York and Boston are among the markets where active for-sale listings have fallen the most over the last couple of years. Know too that California’s Riverside and San Diego are among the metros with the youngest renters. The median age in Riverside is 36 and in San Diego, the median age is 37. This high concentration of Millennials and Gen-Zers most definitely drives rental demand sky high.
The places where rents are lower than listing prices include:
- San Jose – -$564
- Oklahoma City – $530
- Kansas City – -$351
- Seattle – $287
- Austin – -$284
Remember too that all five of these cities have very active local economies with unemployment rates of 2.6% or lower as of April 2022. Strong local economies and job markets drive homeownership for both existing residents and new arrivals. Low unemployment also attracts rental property investment which, in turn, drives more rental units on line.
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