The U.S. housing market has hit an extraordinary period of price increases. Nationwide, the growth rate in the first half of the year was in the low double digits. In some large cities, the number was over 20%. One reason is the historically low interest rates. Another is that people want to locate from the expensive coastal cities like New York and San Francisco to more affordable, smaller cities. Many of these also are perceived to have a better quality of life. The relocation boom also has been driven by the COVID-19 pandemic trend that has allowed many people to work from home.
However, not all Americans want a new house. Millions have elected to rent. Like the prices of homes, rental rates per month are up well into the double digits in some cities.
Realtor.com has just released its monthly rental report for August. The primary conclusion was that it was the first month on record when rent growth has hit double digits, with a year-over-year pace of 11.5% across America’s 50 largest markets based on population. That was higher than home price increases in the same month, which were up 8.6% from the year before.
Realtor.com Chief Economist Danielle Hale commented that:
Put simply, August trends suggest rents are making up for lost time. Rents remained low during some of the worst months of the pandemic, growing at a sub-2% pace from September 2020 to March 2021, which is also when for-sale home prices were growing by double-digits.
Most of the rents grew fastest in what Realtor.com calls “secondary cities,” which are more affordable than the nation’s largest metros.
The market in which median rent costs rose fastest in August year over year was Tampa, which as a rise of 30.6%. Tampa is among the fastest-growing metro areas, with a population growth of 14.09% from 2010 to 2020, according to the Census Bureau. With a population of 3,175,275, it is America’s 18th largest city.
These are the 10 markets where rents rose fastest in August:
| Market | Rent | YOY Increase |
|---|---|---|
| Tampa, Florida | $1,760 | 30.6% |
| Riverside, California | $2,234 | 28.6% |
| Miami, Florida | $2,432 | 27.0% |
| Phoenix, Arizona | $1,688 | 25.5% |
| Las Vegas, Nevada | $1,515 | 23.4% |
| San Diego, California | $2,695 | 23.4% |
| Memphis, Tennessee | $1,200 | 21.8% |
| Austin, Texas | $1,618 | 21.7% |
| Orlando, Florida | $1,620 | 21.4% |
| Atlanta, George | $1,697 | 21.2% |
Click here to read about America’s fastest-growing housing markets.
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