Rising rents are making waves nationwide, with the latest data showing increased rental prices.
The national rent index revealed a 1.2% uptick in May for both one-and two-bedroom apartments, pushing their median prices to $1,504 and $1,865, respectively, according to online rental platform Zumper. It's the first time in 20 months that monthly rent growth rates have surpassed 1%.
The rent surge and persistent inflation are expected to add further strain to the consumer price index (CPI) and could delay expected rate cuts.
"This notable rise in rent coupled with the current persisting inflation suggests that there will be even more pressure put on the CPI in the coming months and rate cuts by the Fed may be pushed back further than previously anticipated," Zumper CEO Anthemos Georgiades said.
May 2024 One-Bedroom Median Rent Prices
- New York$4,200
- Jersey City, New Jersey$3,330
- San Francisco$2,950
- Boston$2,830
- Miami$2,770
- Jan Jose, California$2,570
- Arlington, Virginia$2,380
- San Diego$2,370
- Los Angeles$2,300
- Washington, D.C.$2,300
Some of California's largest cities are experiencing a decline in annual rent rates. Oakland was down 9.1%, Sacramento dropped 8.1% and Los Angeles declined 5%.
Unlike Sun Belt markets, it's not a supply glut driving rents down. Instead, it's declining demand, as seen in San Francisco, where rent declined by 1.7%, and Los Angeles has seen some of the largest population losses in the past few years. The cities also have not recovered from COVID-related job losses - California posted the highest unemployment rate of all states in April at 5.3%. Los Angeles has nearly 60,000 fewer jobs than before the pandemic, and San Francisco has about 45,000 fewer jobs.
Meanwhile, other areas like Syracuse, New York, and Columbus, Ohio, are witnessing unprecedented growth, with rents climbing more than 20% since last year.
Syracuse, which saw rents for one-bedroom apartments skyrocket by 28.6%, has seen historic population growth, is home to a large national university and has a high rate of homeownership rather than rentals.
Columbus, where rent rose 22.5%, has been popular for people seeking a more affordable lifestyle and employment opportunities. Intel and Google are planning new manufacturing plants and data centers, respectively, in the Columbus area, which saw the largest population growth among major U.S. metropolitan areas at the end of 2023.