The housing shortage has forced many potential buyers to move into rental properties as they look for their next home (and often find themselves on the wrong side of a bidding war). That option, however, is becoming increasingly expensive.
ent prices jumped 12% last year for a median one-bedroom apartment, hitting an all-time high, according to Zumper, the nation’s third largest real estate platform. A median two-bedroom apartment saw rent prices jump more than 14%. The median price for a one-bedroom rent reached $1,374 in January. The median price of a two-bedroom apartment reached $1,698.
The news comes as the latest S&P CoreLogic Case-Shiller National Home Price Index shows home prices for buyers in November jumped 18.8% year-over-year. And experts are predicting a brutal spring housing market.
The rental escalations come after two years of essentially flat rent rates. Year-over-year growth in January 2021 was 0.6%, and in January 2020 it was 0.3%. And the skyrocketing rent prices are expected to continue.
“For the National Index to move by double digits takes incredible rent growth everywhere, and that’s exactly what occurred,” the Zumper report read. “The sudden increase in housing demand since the pandemic began in March 2020 exacerbated what was already a national housing shortage that dates back to the financial crisis in 2008, after which annual housing production dropped substantially. While some of the post-pandemic demand might fade as the pandemic becomes endemic, the housing shortage is a long-term issue that will likely continue to push rent up in 2022.”
New York, to little surprise, remains the most expensive place to rent, with the price of a one-bedroom jumping over 25% in the past year, while a two-bedrooms costs 27% more. San Francisco is second.
The real surprise, though, is the fast-rising cost of rentals in Boston, which could surpass San Francisco in the coming months. The median one-bedroom now costs $2,720, just $100 less than the California city (a 26.5% jump in one year), while a two-bedroom is $3,150, up 26%.
“It’s hard to overstate how astounding that is,” says the report. “In the winter of 2019, San Francisco’s median one-bedroom rent was $1,300 higher than Boston’s.”
Other cities that saw increases of more than 20% for two-bedroom units include Miami; San Diego; Scottsdale, Ariz.; Fort Lauderdale, Fla.; Seattle; Orlando and Tampa.