Even though the housing market has cooled and homebuilders are saying the market has entered a recession, home prices are still high — and are still putting pressure on rental prices.
Rent increases are continuing, though they did slow in recent months as inflation and high housing costs strain renters.
The national median asking rent rose 14%, to $2,016 a month, in June from a year earlier. Though that’s still a double-digit yearly increase, it’s the smallest annual hike since October. From May, asking rents were up 0.7%, the smallest month-over-month increase since the beginning of 2022, according to Redfin’s rental market tracker report released in July.
That’s after the typical U.S. asking rent price crossed the $2,000-a-month threshold for the first time in May, according to Redfin.
The impact? Renters across cities and income brackets are struggling to find new homes or pay for the ones they already live in, Bloomberg reported earlier this month. People of color and those with lower incomes are the most affected. About 58% of households headed by Black adults rent their homes, along with nearly 52% of Latino-led households, according to a Pew Research Center analysis of census data.
“Increases are particularly steep in metropolitan areas that saw large influxes of new residents during the pandemic, but the rental market is sparing almost nowhere and no one,” Bloomberg reported.
“While the affordability crisis in the U.S. is not new, it has snowballed over the past year as people returned to big cities and some areas short on housing supply saw a boom of new residents. Demand for rentals has soared, with many would-be homebuyers backing out of the market after mortgage rates jumped this year as a result of the Federal Reserve’s aggressive interest rate hikes.”
Daryl Fairweather, Redfin’s chief economist, said “rent growth is likely slowing because landlords are seeing demand start to ease as renters get pinched by inflation.”
“With the cost of gas, food and other products soaring, renters have less money to spend on housing,” he said. “This slowdown in rent increases is likely to continue, however rents are still climbing at unprecedented rates in strong job markets like New York and Seattle and in areas like San Antonio and Austin that soared in popularity during the pandemic.”
Rents are still going up — just at a slower pace as inflation and high costs pinch demand.— Katie McKellar (@KatieMcKellar1) August 16, 2022
The median national asking rent was $2,016 in June, according to @Redfin. That's still a 14% year over year increase.
Slower? Yes. But still high. https://t.co/4zOEdW0JS9 pic.twitter.com/ZeIhhxnAgX
Cities with the fastest-rising rents
Rent in some places is going up faster than others, especially in areas that are still popular even after the pandemic housing frenzy has died down.
The city that had the fastest-growing rent in the nation in June? Cincinnati, Ohio.
Cincinnati’s median asking rent rose a striking 39% year over year in June, the largest jump of the 50 most populous U.S. metropolitan areas included in Redfin’s analysis.
Next came Seattle, Austin and Nashville, which also saw rents go up over 30%.
Here’s a ranking of the top 10 cities with the fastest-rising yearly rent increases included in Redfin’s analysis:
- Cincinnati, Ohio — 39%.
- Seattle, Washington — 33%.
- Austin, Texas — 32%.
- Nashville, Tennessee — 31%.
- New York, New York — 27%.
- Nassau County, New York — 27%.
- New Brunswick, New Jersey — 27%.
- Newark, New Jersey — 27%.
- Portland, Oregon — 24%.
- San Antonio, Texas — 23%.
Cities with the most expensive rents
Not surprisingly, areas with the most expensive rents are located in states like New York, New Jersey, Massachusetts and California.
Here’s a list of the top 10 metros with the most expensive median asking rent in June, according to Redfin:
- Nassau County, New York — $4,157.
- New Brunswick, New Jersey — $4,157.
- New York, New York — $4,157.
- Newark, New Jersey — $4,157.
- Boston, Massachusetts — $4,031.
- Oakland, California — $3,812.
- San Francisco, California — $3,812.
- San Jose, California — $3,663.
- San Diego, California — $3,439.
- Anaheim, California — $3,438.