Top Metros for Apartment Rent Growth
According to the Harvard Joint Center for Housing Studies “2019 State of the Nation's Housing Report,” U.S. housing production still falls short of what is needed to keep up with household formation, which is keeping pressure on increasing home prices and rents. The report reaffirms that demographic trends should support strong rental housing demand and if homeownership rates remain near their current levels (currently 64.3%), the Joint Center estimates that renter household growth will exceed 4.2 million by 2028.
Nationwide, the average rent climbed 3.2% to $1,356 a month over the past year. At 7.5%, Phoenix recorded the largest year-over year rent growth among the largest U.S. metropolitan areas in the country. The Valley of the Sun was followed by Las Vegas (7.1%) and Austin (4.5%). Average monthly rents are still highest in New York City ($2,827), San Francisco ($2,671), and Boston ($2,351) where rents have been rising quickly for years, but the rate of growth is slowing as they approach market highs.
Rent growth is even headed toward less expensive markets as people move to those metros seeking lower prices or follow a company that has relocated in search of affordable real estate or tax incentives. Rent growth in metros such as Charlotte (4.1%) and Indianapolis (3.9%) are edging ahead of increases in major cities like New York or Los Angeles, but still offers tenants some of the most affordable rents in the country at $1,176 and $906, respectively.
Sources: Greysteel Research; CoStar; Harvard Joint Center for Housing Studies; National Apartment Association