The cost of rent continued its meteoric rise in April, marking the 13th month in a row of record-setting increases for single-family units.
Nationally, single-family rent jumped 14% year over year in April, according to a report released Tuesday by the real estate data firm CoreLogic. Rent in several major metropolitan areas, particularly Sun Belt cities, rose much higher than that — with no signs of slowing down.
“Single-family rents continue to increase at record-level rates,” Molly Boesel, principal economist at CoreLogic, said in the release. “We expect single-family rent growth to continue to increase at a rapid pace throughout 2022.”
CoreLogic’s report breaks down the rental increases in 20 large metro areas. Of those cities, Miami by far tops the list, posting a nearly 41% jump for the year ending in April.
Here’s a look at the metros where rent prices are increasing the most:
- Miami: 40.8%
- Orlando: 25.8%
- Phoenix: 17.8%
- San Diego: 17.3%
- Las Vegas: 17%
Rent growth is tamer than the national average for many major metros in other regions. Rent in the greater New York area, for example, grew 8.4% over the same period. Honolulu saw the least growth of the major metros listed by CoreLogic, at 7.7%.
A shortage of rental properties paired with strong wage gains due to a tight labor market are major contributors to the soaring cost of rent, CoreLogic says. This all fuels high inflation rates, which are at levels unseen since the early 1980s.
According to the Labor Department, the inflation rate in April was 8.3%. In May, it eked even higher to 8.6%. Such high inflation rates are clobbering homebuyers as well. Not only are home prices historically high, the Federal Reserve is aggressively raising interest rates in an effort to quell inflation.
In the long run, this strategy should bring home prices down. But in the meantime, buyers have to contend with mortgage rates that are nearing 6% along with astronomical home prices. According to the National Association of Realtors, the median selling price of existing homes hit an all-time high in May: $407,600, marking a 14.8% increase from the year prior.
The topsy-turvy housing market can keep would-be buyers in a rental unit instead, thus limiting supply and driving rent up even higher.