Just as home values and prices are increasing across the country, we are also seeing a huge jump in rent prices. The rental market is more competitive than ever right now and over the next couple of days we'll share information on the market and how to manage your rental efficiently.
Today's Renters
The make-up of today's renters is very diverse. People who cannot afford or are not qualified to buy a home historically make up a large percentage of renters. Currently, there is an influx of renters who are comprised of homebuyers who cannot find a home to purchase right now because of the low inventory of homes available for sale. An article on Realtor.com published on January 6, 2022 called December 2021 Monthly Housing Market Trends Report states, "The national inventory of active listings declined by 26.8% over last year, while the total inventory of unsold homes, including pending listings, declined by 16.1%. The inventory of active listings is down 57.1% compared to 2019." Many people who would be homebuyers in today's market are actually forced to rent instead of buy a home. In addition, the rental market consists of people who are working remotely, taking time off from work or are just vacationing in vacation rentals. This is especially true in the hot markets in the warmer-weather states such as Florida, Texas, Arizona, North Carolina, South Carolina, Georgia, Tennessee and the like.
Average Costs to Rent
Rent prices vary from state to state. However, it is safe to say that rent prices across the United States are increasing. The article Average Rent by State 2021 has an interactive map of the average rent by state. The article states, "rent prices in major cities and metro areas around the U.S. are becoming increasingly expensive." For example, California and Hawaii have the highest median rental prices at $1,503 and $1,617 respectively. The northern east coast states such as New York, Maryland, Maine and New Jersey come in at a close second, with median rent prices ranging from the $1,200 to $1,400 per month range. You will find similar median rent prices in Florida, Colorado, Washington and New Hampshire. The lowest rent prices are found in the midwestern states.
Vacation rental rates in the warm-weather states in the winter and spring can be mind-blowing. For example, in Sarasota, Florida it is not uncommon to pay $150 to over $200 per night for a one or two bedroom in high season.
Rental Price Increases
Rental prices in many popular areas around the country have increased at alarming rates. An article on globenewswire.com, Inflation Hits Renters: 11% Overall Rent Increase in 2021 states "American renters saw an 11% increase in median asking rent from January to December of 2021. In a normal year, a 3-4% increase is typical." Rental increases are especially high for single-family homes versus apartment living.
The Factors
The Coronavirus pandemic has a lot to do with rising rent prices. People are seeking rentals where they can enjoy more space to work from home, Covid-safe outdoor space and better accommodations for extended families and pets. The rising interest rates are taking some first-time and other homebuyers who are barely qualified out of the market to buy a home. The inflation of home values and price increases are doing the same. Low inventory is causing would-be homebuyers to continue to rent.
Just as homes for sale are a hot commodity, rental homes are as well. This is already continuing into 2022.
