Photo: Robert Clark
Increased demand edged up rents in most large US cities in January.
Over the last year, rents rose in nearly 90 percent of the largest cities, with only 2 percent of cities recording annual declines in rent, according to a report released last week by the listing site RentCafe.
The national average rent rose 2.8 percent annually to $1,361 in January, but remained flat from the previous month. At the same time, average studio rents climbed 2.5 percent from last year to $1,259, one-bedroom rents increased 3.4 percent to $1,225 and the average two-bedroom rent rose 3.5 percent to $1,408.
“Demand for rentals remains elevated throughout the country, sustained by an improving economy and low unemployment. Renters continue to embrace apartment life, as rent prices are increasing at a strong and steady pace,” writes RentCafe in the digital release.
Of the 250 cities studied by RentCafe for the report, rents fell annually in only 6 cities in January, including Brooklyn (classified as a “city” by RentCafe) — where the average rent declined 1.1 percent year-over-year to $2,692 per month.
“With an expanding inventory of new apartments, concessions in Brooklyn were at an all-time high last year, causing overall rents to shrink a little,” Nadia Balint, RENTCafe real estate writer, tells BuzzBuzzHome.
The other cities that recorded annual declines in rent were Lubbock, TX (6.3 percent), Norman, OK (2.3 percent), McAllen, TX (2.2 percent), Kansas City, KS (1.7 percent), and Baton Rouge, LA (1.2 percent). Rents fell the most in Lubbock due to a surplus of inventory.
Meantime, Odessa, TX recorded the largest annual gain in rent of the cities studied. The average rent rose 35 percent to $1,153 in Odessa.
RentCafe discovered that several smaller cities are also continuing to record large increases in rent. In fact, three “small” cities broke into the top 10 cities that have the fastest growing rents — Gilbert, AZ, Roseville, CA and Fort Collins, CO.
These smaller cities are seeing a greater impact of tight inventory compared to larger cities.
“Lack of inventory is a common reason for rent increases in some mid-size and smaller markets, which, for various reasons, have not been very active in residential development,” Balint says.
Manhattan topped the list of the top 10 cities with the most expensive rents — despite an annual decline in the average rent. The average rent in the Manhattan fell 1 percent from last year to $4,079 in January, but remained unchanged from the previous month.
Jersey City, NJ landed in the sixth position with an average rent of $2,855, which was up 2.7 percent from the same time last year.
Five of the top 10 most expensive rental cities were located in California: San Francisco, San Mateo, Sunnyvale, Santa Clara, and San Jose.
Renters hoping to get a break on rent in 2018 could be sorely disappointed.
“Going forward, the major issues facing the US housing market will concern population shifts and affordability. As affordability becomes a critical issue, renters can expect property managers to attract their interest via unique services or amenities,” writes RentCafe.
Click here to read the entire report.