Much attention has been focused on double-digit home price increases, rising mortgage rates and higher gas and food prices. But tenants are getting slammed with rent increases, too.
Nationally, in the 12-month period that ended in February, rents increased by 17.1 percent to a new average high of $1,792 per month, according to a report from Realtor.com. A common measure of affordability is to have monthly housing costs below 30 percent of a household’s income. Realtor.com’s report found that rents ate up an average of 29.7 percent of household income in the 50 largest metro areas, up from 24.8 percent in February 2021.
The share of income going to rent has gone up in numerous markets, increasing to 59.5 percent in Miami, 46 percent in Los Angeles, 45.9 percent in Riverside, Calif., 44.7 percent in Tampa, 42.9 percent in San Diego and 40.9 percent in New York.
Washington, D.C., ranked as the fifth most affordable city for renters, with the share of household income going to rent at 22.7 percent. Even though D.C.’s median rent was $2,078 in February, according to Realtor.com, higher household incomes make renting more affordable than in many cities. The rental share of income was lowest in Kansas City, Mo., at 19.9 percent of income, followed by Oklahoma City at 21.1 percent, Denver at 21.9 percent and St. Louis at 22.3 percent.
Only two cities (Milwaukee and Kansas City, Mo.) out of the top 50 most populous metro areas saw the median rent decline in February 2022 compared with February 2021, according to the Redfin real estate brokerage.
Redfin chief economist Daryl Fairweather said rents are increasing rapidly in part because of higher home prices and higher mortgage rates. Would-be home buyers are forced to rent when they are priced out of the housing market, and supply hasn’t kept up with demand for rentals.
The cities where rents rose the fastest between February 2021 and February 2022 include:
⋅ Austin — 40 percent
⋅ Portland, Ore. — 39 percent
⋅ New York — 36 percent
⋅ Newark — 36 percent
⋅ Nassau County, N.Y. — 36 percent
⋅ New Brunswick, N.J. — 36 percent
⋅ Fort Lauderdale — 30 percent
⋅ West Palm Beach — 30 percent
⋅ Miami — 30 percent
⋅ Denver — 29 percent
In the Washington, D.C., metro area, rents rose 12.4 percent year-over-year.