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US Rent Prices Heating Up

National Rent Price Growth Rising

Reports from NMHC for April will be out in May, however current reports seem to suggest multifamily rents are on the rise. The current rent payment tracker however shows more lateness in rent payments.

Of course, this is only the multifamily rent sector. The small landlord and property management sector has not fared as well. RealPage reports a slight increase in renters paying rent on time (up to mid April).  RealPage’s data is one of 5 rent payment data sources used by NMHC.

Special thanks to Zumper and Apartmentlist for the monthly reports which you can dig into more deeply on their websites. Both services agree on most trends, however take note of where they don’t.

Zumper Rent Report

Zumper shows how diverse the rental market has become. Prices have been flat in most metros (although down in Manhattan and San Francisco) yet have risen in smaller towns and cites where renters have migrated to.  That migration represents a huge challenge to urban landlords who must find ways to woo them back.  Marketing will be a bigger factor in landlord and property manager success in 2021/2022.

Rent growth in pandemic destination cities is beginning to wane.

Rents Flat in Urban Centers. Screenshot courtesy of Zumper.com

Rent prices, especially apartment rent prices tumbled in 2020, yet are climbing as depicted in this updated chart below from Apartmentlist.  Rents are back to where they were 12 months ago. We wonder if the price growth will greatly outpace last summer’s rents as we recover from this unusual period.

National Rent Index.

National Rent Index. Screenshot courtesy of Apartment List.

In the housing market, prices are rocketing and they are by far outpacing rent prices.

How long can rent prices not follow home prices? And as Covid 19 recedes due to the vaccinations, it shouldn’t be long before apartment rent prices begin their climb. According to Apartmentlist, 9 out of 10 of those cities worst impacted by the pandemic exodus, are seeing price rebounds.  While the K-shaped recovery from the pandemic recession could see the loss of employed renters, it may not affect demand for most segments for Class A and Class B apartment properties.

Single family rental properties are different class of rental property and you can learn about them in that post.

Glut of Apartments in some cities a tough challenge for Urban Landlords

There is a glut of apartments for rent in Manhattan, San Francisco, San Jose, Chicago, Oakland, Washington, Boston, Seattle, and other high-density downtown cities.

Investors are scooping them up in anticipation of workers returning to the cities, student returning to school, and young people living at their parents venture back out onto their own. There aren’t enough houses to supply the market, and there is little in the way of affordable homes for sale.

And the economic recovery this summer will only fuel demand for rentals. As Apartmentlist’s survey reveals, some smaller cities are seeing very strong price growth (e.g., Boise Idaho has risen beyond last reports 14% to 16% now).

Rents in hot markets.

Screenshot courtesy of Apartment List. Rents in hot markets.

Zumper too backs up Apartmentlist’s market rent price info and shows how the migration out of the big metros to neighboring suburbs or smaller cities has pushed up rent prices in those locations. They also show how the trend to the smaller cities/towns is waning as price growth is moderating there and beginning to rise back again in the big metros.

Zumper shows more strongly than Apartmentlist’s data how rent prices are climbing in the US.

USA national rent growth. Screenshot courtesy of Zumper.

Rents in cities hard hit by the pandemic are recovering.

Zumper found San Francisco, New York, San Jose, Seattle, Miami, St Petes, Cleveland, Rochester, and Detroit suffered the largest drops in 2 bedroom rent prices. In one bedroom apartments, San Francisco, Oakland, Los Angeles, Seattel, St Petes, and Buffalo had the largest reductions in rent prices.  The California and New York markets for smaller rentals has its marketing and leasing job cut out for it.

Read more on the single house rental market, apartment rental market and the national housing market.

Rent Prices by City, Zumper Estimates for March

These were the top cities with the highest month to month growth in rent prices.

One bedroom and two bedroom rental prices USA. Screenshot courtesy of Zumper.

See more research on the rental apartment market in the US.  And discover more about the UK housing market and Australian property market.

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