Rent rose 1.1% in March – the first month of growth since the summer
Rent across the US rose by 1.1 per cent in March, which marked the first month of growth since last summer as the economy continues to rebound from the pandemic.
Data from Realtor.com shows that the increase occurred across the 50 largest metros in the US, bringing the median rent to $1,463.
Rents in the 50 largest metro areas last March had growth of 3.2 per cent. But at the height of the pandemic, rent growth slowed, decreasing to 1.9 per cent in May before jumping to 2.2 per cent in June and July.
Rent across the US rose by 1.1 per cent in March, which marked the first month of growth since last summer
Rents in the 50 largest metro areas last March had growth of 3.2 per cent. But at the height of the pandemic, rent growth slowed, decreasing to 1.9 per cent in May before jumping to 2.2 per cent in June and July (depicted)
From there, the decline was steady, dropping as low as 0.6 per cent in February 2021 before bouncing to 1.1 per cent in March 2021.
‘Although we’re still below the 3.2% growth we were seeing before COVID, average rent growth in the nation’s largest housing markets saw its first uptick since July 2020, and rents are poised to rise at a quickening pace as recovery continues,’ Realtor.com’s chief economist Danielle Hale said.
Rising employment numbers and the coronavirus vaccine rollout has inspired more people to come back to cities and look for apartments to rent, according to the Wall Street Journal.
A hot home sales market is also helping to drive the increase in rent, as there is simply less housing stock for purchase than buyers might anticipate.
‘A lot of these markets with rent increases are also markets that have pretty substantial home-price increases,’ Hale said.
‘It’s creating opportunities on the rental side,’ said Greenwich real-estate developer Eric Schwartz.
However, the Journal notes that the rent increases could help spur inflation, with stimulus money going into circulation, low borrowing rates and consumer spending demand as people re-emerge from various forms of lockdown.
The data also showed that rent isn’t rising across all markets.
Hale said: ‘The tech markets and several big metros like Chicago and Los Angeles continue to see rent declines, but generally at a slower pace than in recent months, which could signal a turnaround in the coming months.’
New Orleans, Louisiana, is the fastest growing metro area, with the median rent reaching $1,305 in March, a 15.6 per cent increase from last year.
New Orleans has actually led the nation in rent growth for the third month in a row.
A hot sales market is also helping to drive up rent prices, as potential buyers find less housing stock than anticipated
Riverside, California, Memphis, Tennessee, and Sacramento, California, also showed growth by over 10 per cent compared to last year.
Rent decreased in California metro areas like San Jose, Sunnyvale and Santa Clara, where the median rent is now $2,685, a 14.1 per cent decrease.
Cities in Washington state also saw a significant decrease with Seattle, Tacoma and Bellevue reporting median rent of $1,750, a 9.7 per cent decline.
The data was collected by using rental units that included apartment communities as well as private rentals such as condos, townhomes and single-family homes.
All units were studio, one-bedroom, or two-bedroom units.
Meanwhile, for the first time in 15 years, its cheaper to buy a new house than one that has been previously owned.
According to data from the National Association of Realtors, the median for a previously owned single family jumped 18.4 per cent to $334,500 while new properties sold for a median of $330,800 for the first time since 2005.
First-time buyers were responsible for 32 per cent of sales in March, up from 31 per cent in February and down from 34 per cent in March 2020.