As the U.S. housing market pandemic feeding frenzy simmers down, rental rates aren’t immune. But even though rent increases are slowing, prices are still going up.

Rents nationwide hit another record high in July — with the median asking rent jumping up 14% year over year to $2,032 — but that marked the smallest annual increase since November, according to Redfin’s August rental market tracker.

On a month-to-month basis, the median asking rent ticked up only 0.6% percent, marking the smallest gain since February and down from a 2.1% increase a year earlier.

It’s a sign that landlords are grappling with the impact of inflation while recalibrating to a more tempered housing market.

“Big rent hikes may finally be coming to an end as landlords adjust to waning tenant budgets that are being strained by the rising cost of groceries, gas and other regular expenses,” said Daryl Fairweather, Redfin’s chief economist. ”Still, rents are increasing faster than overall inflation, which has started to ease.”

Cities with the most expensive rents — and where costs are rising the fastest

Rent price predictions: Rent hikes are largely expected to slow — but not disappear, Fairweather said. But there’s a caveat, especially for big city areas “with strong job growth and limited new housing construction.” Cities like New York and Seattle, she said, “will likely continue to experience large rent increases.”

Especially in big-city areas, rents are rising even faster than home prices — signaling the rental market is tightening as more Americans turn away from house shopping.

In the early months of the COVID-19 pandemic, rents grew slower than usual. That below-average growth continued well into 2021 in larger metro areas with many remote jobs. However, many secondary markets saw rent prices surge as remote workers took advantage of their new found flexibility to relocate to more affordable areas, according to Nationwide, rent price increases ticked up to a double-digit pace in 2021.

Why the housing market is in recession in terms of sales — but not prices
They bought at the height of the housing frenzy. Now they’re ‘house rich, cash poor’

“With the rental vacancy rate continuing near its historic lows during the pandemic, in which just 5.7% to 6.8% of rental housing units are vacant at any point in time compared to 7% or more, historically, renters are also contending with limited supply and excess demand that leads to upward pressure on rents,”’s 2022 housing forecast states.

“In 2022, we expect this trend will continue and fuel rent growth. At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth as rents continue to rebound from slower growth earlier in the pandemic.”

Here’s a sign that may indicate homeowners are thinking they’ll get more bang for their buck if they rent out rather than sell in this market: Some home sellers are changing their minds, switching their for-sale listings to rentals as the housing market cools, according to Rick Palacios, head of research at John Burns Real Estate Consulting.

Why it matters: As home prices have climbed, renters have also seen significant price jumps especially in areas that gained popularity amid the COVID-19 housing frenzy. Depending on the area, home price increases outpaced rent hikes amid the pandemic.

But now, as more and more Americans are either priced out or decide against buying a home amid today’s high prices and higher mortgage rates, that’s upping the pressure on the rental market.

In some areas — especially in big cities like New York — rents are rising even faster than home prices.

“New York City prices continue to skyrocket, with no peak in sight as people relocate to the city in greater numbers than in pre-pandemic times,” Zumper’s national rent report released Monday stated.

View Comments

How expensive is rent in New York? New York City remains the priciest city in the nation, with a median one-bedroom rent up almost 40% year over year to $3,930 a month, and a two bedroom rent up almost 47% to $4,400, according to Zumper.

“Renters looking for a new home are experiencing the most competitive market in modern history, with bidding wars and sight-unseen lease signings becoming the norm,” Zumper’s report stated.

Zumper’s rent analysis includes 100 cities nationwide, with data aggregated from over 1 million active listings.

Rent in Salt Lake City, Utah: Where does Salt Lake City’s rent rank? It’s the 54th most expensive city, with the median one-bedroom costing $1,280 and a two-bedroom unit costing $1,670. That’s up 19.3% year over year, according to Zumper.

The renter’s dilemma
Stuck between rent hikes and high home prices, this Utah family is scraping by to afford a home
Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.