Residential rental rates continued their upward climb in April, hitting a new record high during the month and dimming hopes that U.S. rents might soon return closer to the norm.
The median monthly rent in the 50 largest U.S. metropolitan areas reached an all-time high of $1,827, according to Realtor.com. That was up 16.7% from April 2021 and continued a trend that began early last year. Rents have increased steadily along with housing prices, which have also set record highs in recent months.
Rents keep rising because the supply of available units can’t keep up with demand. As Realtor.com noted, the national rental vacancy rate has held below 6% in each of the last three quarters. Landlords can (and do) charge higher rents, and because home prices are surging as well, renters have little choice but to pay the higher rates.
“Renters are being left with few options but to meet higher rents and, in some cases, even offer above [the landlord’s] asking price — whether they can afford to or not,” Realtor.com Chief Economist Danielle Hale told CNN Business.
For renters, the one slight glimmer of hope is that the rate of increase decelerated for the third straight month in April from the 17.1% peak in January 2022. That’s the good news. The bad news is that a 16.7% increase is still very stout. If annual rent growth were to stay around 17% through the summer, the national median rent would eclipse $2,000 in August.
Sunbelt markets once again saw the biggest rent increases, led by a trio of Florida cities. The median rent in Miami rose 51.6% year-over-year in April, while Orlando saw a 32.9% gain and Tampa’s rent rose 27.8%. Other Sunbelt markets with high rent growth included San Diego (25.6%); Las Vegas (24.8%); Austin, Texas (24.7%); Nashville (24.1%); Raleigh, North Carolina (23.9%); and Jacksonville, Florida (23.3%) .
Northeastern and Midwestern cities such as Pittsburgh (4.2%), Detroit (4.5%) and Minneapolis (5.5%) saw comparatively small rental increases.
Studio unit rents climbed at the fastest pace in April, growing 17.2% from April 2021 compared to 15.9% for 2-bedroom units and 15.6% for 1-bedroom units. Studios have seen the most year-over-year rent growth every month this year, led by sharp hikes in big cities like New York (29.1%), Los Angeles (23.2%) and Chicago (21.5%).
More From GOBankingRates