Last year’s US rental market proved to be full of surprises as some hot markets underperformed, while others saw record demand for housing. But perhaps the most surprising trend uncovered by a new report from online search portal RentCafe was that in six major US cities, renters paid the equivalent of nearly 13 months worth of rent last year.
The national average rent increased four percent year-over-year to $1,210 per month in 2016. And by using rent statistics from its sister site, Yardi Matrix, RentCafe discovered that rent grew by 9 percent or higher in 2016 from the previous year in six larger US cities. At those rates, renters essentially paid for a 13th month in 2016 compared to what they paid in 2015.
Sacramento, CA renters paid 12.2 percent more in 2016, with the average rent increasing to $1,193 per month — the largest rent increase of the cities studied. The other five cities where renters essentially paid for an extra month were Stockton, CA, Colorado Springs, CO, Detroit, MI, Mesa, AZ and Long Beach, CA.
Many small to mid-sized cities recorded strong rent growth compared to larger cities, in part due to limited supply, says RentCafe. At nearly eight percent growth year-over-year, Riverside, CA outpaced the larger nearby city of Los Angeles, which recorded 5.7 percent price growth in 2016. In fact, more of the top 20 cities with the fastest growing rents were small to mid-sized, according to the data.
Meanwhile, rent growth slowed in many of the country’s “hot” markets last year. In San Francisco, one of the country’s most expensive cities, the average rent actually decreased nearly one percent year-over-year — compared to 2015 when it posted double-digit gains. Similarly, in Manhattan — which currently has the most expensive rent in the country — average rent only increased 0.4 percent to $4,144 from last year.
Apartment construction in 2016 helped to ease the tight inventory in many of the country’s hottest rental markets, essentially putting the brakes on “out-of-control” rising rents, according to RentCafe.
The Midwest has the cheapest rents on average in the country — Wichita, KS has an average rent of only $631 per month, Toledo, OH has an average rent of $650 per month, and Tulsa, OK has an average rent of $672 per month.
Click here to read the entire report.