Did you know? Rental prices broke records in 44 cities last month. Of course, with the price of everything going up these days, perhaps this is not surprising. According to Realtor.com, the U.S. median rental price in June jumped 8.1% compared to a year ago, reaching $1,575. As for the largest rental price increases, 2-bedroom units saw their prices increases by 10.2%. In fact, rental prices in 44 of the largest 55 metros broke records last month.
Why are rental prices rising so much?
As with most things in the real estate market these days, all roads lead back to the tight inventory of homes for sale. In addition to the typical market of renters competing for housing, we are now seeing many would-be home buyers enter the rental market. In many cases, these would-be buyers have been outbid on several homes and are coming up empty on their home purchase search. In addition, some of these would-be buyers simply feel as though they are being priced out of the market. This is resulting in a significant number of Americans entering the rental market that were not originally intending to do so.
The top 10 metro markets for rental price increases
- #1. Riverside-San Bernardino-Ontario, CA: (+24.2%)
- #2. Memphis, TN-MS-AR: (+23.0%)
- #3. Tampa-St. Petersburg-Clearwater, FL: (+21.1%)
- #4. Phoenix-Mesa-Scottsdale, AZ: (+20.9%)
- #5. Sacremento-Roseville-Arden-Arcade, CA: (+17.5%)
- #6. Cincinnati, OH-KY-IN: (+17.1%)
- #7. San Diego-Carlsbad, CA: (+17.0%)
- #8. Las Vegas-Henderson-Paradise, NV: (+16.0%)
- #9. Atlanta-Sandy Springs-Roswell, GA: (+15.6%)
- #10. Jacksonville, FL: (+14.4%)
Unfortunately, rental prices are rising at a faster pace than income. This is making it particularly challenging for lower-income Americans to find adequate housing. In many cases, we are seeing multiple families sharing a home in order to split the costs. These challenges are predicted to persist until we see an improvement in the overall housing inventory numbers. With this said, the most recent data on housing inventory appears to be improving somewhat. As Americans feel more comfortable with where things are with the pandemic, we expect to see more homes coming to the market.
In South Florida particularly, we are continuing to see robust demand for rental housing. With many Americans opting to work remotely, this is resulting in more “out-of-staters” test driving the South Florida market temporarily. Some of these short-term trials are resulting in long-term stays. Needless to say, this has only contributed to the competitiveness in the rental housing market as well.
Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. At Live South Florida Realty, Inc., we have been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!