These 5 States Have Seen Massive Rent Spikes in Just 5 Years
The rental market has been steadily becoming more expensive; but, in some locations across the country, the prices have risen much faster. A new GOBankingRates study found that there was a 24.75% rent increase from 2018 to 2023 in the national median rent price.
But in some states, that figure is almost double.
Indeed, in the last five years, five states have seen massive rent spikes: Arizona, Delaware, Maine, New Hampshire and New Mexico have all experienced a whopping 40% increase.
“The five states, which have seen substantial rent spikes in the past five years, all share a common characteristic: the absence of rent control laws,” said Sipho Simela, CEO and founder of Matrix Rental Solutions. “This key distinction has allowed landlords in these states to swiftly respond to evolving market conditions and fluctuations in demand.”
According to Simela, unlike regions with rent control measures in place, where rent increases are more gradually absorbed into the market, these states have provided landlords with the latitude to adjust rents according to the prevailing market dynamics.
Another factor, Simela said, is that remote work has played the most significant role in the changing market dynamics in these states. During the pandemic, the appeal of these states was significantly heightened by their easy access to beaches, mountains and vast outdoor spaces, he said.
“In summary, the combination of unrestricted rent adjustments — coupled with factors such as population growth, limited housing supply, growing economies, urbanization and the influence of remote work trends — has contributed to the notable rent spikes, particularly in urban areas within these states,” he added.
Arizona
- Average rent in 2018: $1,030
- Average rent in 2023: $1,491
- Increase: 44.8%
According to Justin Albertynas, CEO of RatePunk, the influx of tech companies and startups, especially in cities such as Phoenix and Tempe, has driven demand for housing.
“Arizona is quickly becoming a tech hub,” he said, “and coupled with Arizona’s popularity among retirees and its ever-increasing reputation as a more affordable alternative to California, the housing market has seen considerable upward pressure on rents.”
Delaware
- Average rent in 2018: $1,100
- Average rent in 2023: $1,621
- Increase: 47.4%
Delaware enjoys a strategic geographic advantage, nestled near major urban hubs such as Philadelphia and Washington, D.C.
“This positioning makes it an attractive proposition for those who desire proximity to these cities but opt for residences in less densely populated areas,” said Andrew Latham, CFP and director of content at SuperMoney.
In addition, Delaware’s corporate-friendly laws have turned it into a hub for business headquarters, ensuring a steady influx of professionals and consistent job growth, added Latham.
“Also contributing to the rent spike, especially in coastal areas,” he said, “is the increasing popularity of its beachfront properties.”
Maine
- Average rent in 2018: $842
- Average rent in 2023: $1,207
- Increase: 43.3%
Maine has witnessed a boom in its tourism sector, which has a domino effect.
Indeed, as more properties are transformed into short-term rentals to cater to tourists, Latham said, the housing stock available for long-term residents dwindles, pushing rents higher.
“The state’s scenic beauty, rich culture and high quality of life have further added to its allure, drawing many newcomers,” he said. “Yet, the housing developments haven’t scaled up proportionally to meet this growing demand, exacerbating the housing crunch.”
New Hampshire
- Average rent in 2018: $1,192
- Average rent in 2023: $1,682
- Increase: 41.1%
According to Latham, New Hampshire’s growth story is twofold.
On the one hand, it has experienced consistent economic growth, with more businesses finding homes in the state, which is attracting a workforce from various regions.
“On the other hand, its relative proximity to Boston plays a significant role,” Latham said. “Many individuals prefer residing in New Hampshire, with its comparatively lower living expenses, even if they work in Boston. Additionally, the state’s reputation for offering quality education acts as a magnet for families prioritizing academic opportunities for their children.”
New Mexico
- Average rent in 2018: $843
- Average rent in 2023: $1,295
- Increase: 53.6%
New Mexico stands out due to its rich blend of cultures and vibrant art scenes, offering a unique living experience.
Latham explained that cities such as Albuquerque are educational hubs, drawing students and professionals alike.
“Sectors such as clean energy, film and aerospace have seen impressive growth in the state,” he said, “leading to enhanced economic opportunities, which naturally increased housing demands.”
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