Renters sitting out the most expensive homebuying market in decades are facing steep rising costs of their own.
According to a new report from listing platform Realtor.com, the median rent in the 50 largest metro areas in the United States reached an all-time high of $1,792 in February, with overall rent prices climbing 17% over the past year.
That jump is having an enormous impact on many Americans’ budgets. A recent report from Zillow found that signing a one-year lease now would cost roughly $3,400 more than the same lease two years ago.
Much of the national growth in rent prices was driven by huge gains in Sun Belt cities like Miami and Austin, Texas, where the populations have been growing thanks in part to pandemic-related changes like better remote work opportunities.
Across the Sun Belt, rents rose at a rate of 22.5% over the past year. And in Miami, the median rent soared a staggering 55% between February 2021 and February 2022.
Here are the cities where median rent prices have increased the most over the last year, according to Realtor.com. As you can see, the top three cities are in Florida, and all of the entries enjoy more than their fair share of sunshine. The list accounts for studios through two-bedroom properties.
- Miami, Florida: 55.3%
- Orlando, Florida: 35.4%
- Tampa, Florida: 32.3%
- Austin, Texas: 28.1%
- San Diego, California: 25.4%
- Las Vegas, Nevada: 25.1%
- Phoenix, Arizona: 25%
- Jacksonville, Florida: 24.9%
- San Antonio, Texas: 24.2%
- Memphis, Tennessee: 23.4%
Rent is getting less affordable, but so is buying a home
Miami also tops the list's least affordable rental markets in the United States, with a median rent of $2,929. That amounts to nearly 60% of the median household income in the city, though Realtor.com notes that the numbers are skewed partially because of the large number of luxury properties listed last month.
Los Angeles is the second-least affordable city in Realtor.com’s analysis, with a median rent of $2,993 — or 46% of the local median household income. In the 50 largest U.S. metro areas, rent accounted for 29.7% of the typical household income in February, up slightly from 24.8% a year earlier. Generally, experts recommend spending 30% or less of your income on housing.
"With rents up by nearly 20% over the past two years, rental prices are likely to remain high, but we do expect some cooling from the recent accelerated pace,” Realtor.com Chief Economist Danielle Hale said in a news release. “In light of mounting economic uncertainties and the conflict in Ukraine, some households will prefer to buy, in an effort to lock-in a largely fixed monthly payment as a hedge against further inflation.”
The question of whether to buy or rent will keep getting more difficult as mortgage rates continue to rise. But for now, at least, the cost of owning a starter home is still cheaper than renting in more than half of the 50 largest cities in the country.