Apartment Rents Are Rising in Nearly Every Major US City
Amidst a housing shortage, apartment rent is on the rise throughout the United States. According to CoStar News, 44 of the largest 50 U.S. cities have had record high rents, with three cities reporting a year-over-year rent growth greater than 20%. Nationally, the median rent increased 8.1% year-over-year to record a high of $1,575/month. While various factors have played a role in these rent hikes, the national housing shortage is a major driver. It’s important to note that national apartment rents aren’t just recovering from the pandemic; if current rent growth is maintained throughout 2021, we’ll experience the strongest rent gain this century.
In addition to rent prices increasing, the remote work shift brought on by the pandemic has resulted in individuals moving outside of gateway cities into more affordable but still well-developed cities. Additionally, there has been a demand for larger units from renters. This is a result of the significant amount of time Americans have spent at home coupled with their excess savings through decreased spending and additional income from stimulus checks. Another analysis done by CoStar indicates that high demand for apartments paired with a potential slowdown in new inventory, could keep pricing power in the hands of multifamily owners for some time.
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