A new analysis has found that rents are rising at a pace far faster than the rate of inflation – and not just in coastal urban areas like San Diego.
According to ApartmentList.com, rent jumped 11% in the first half of the year. That’s more than double the rate of inflation.
The upward trend also tripled the typical rent growth measured by the service in the years leading up to 2020, when the pandemic impacted the market.
San Diego, with median rents for one bedrooms at just above $1,500 last year, has seen prices rise by 10% in 2021, Apartment List reported.
In fact, almost all of the nation’s 100 largest cities have fully rebounded to pre-pandemic rent levels, the report noted.
Even in smaller cities, for instance, Boise, Idaho, Bend, Ore. and Spokane, Wash., rents are up more than 30% since March 2020.
The report credits several factors driving rising rents:
- More households seeking homes – People fled apartments last year, shrinking the number of households. Now, though, those numbers have hit at an all-time high, according to the report – 131 million households.
- The expense of home ownership – Researchers found that housing stock dropped 48% in the year leading up to March, leaving renters in the lurch, even those with high incomes who would prefer to buy.
- Intensive apartment searches – Google data dates back to 2004, yet apartment-related searches registered higher last month that ever before. In addition, more Apartment List registrants, the researchers said, have indicated that they would like to move immediately.
- Shrinking number of units – With historically low vacancy rates – down by 36% – prices rise. Construction also dropped sharply due to the pandemic.
The researchers, though, forecast a cooling trend in the fall. Rents should continue to rise, just not at the breakneck pace of 2021 so far.
One element that could effect prices? Evictions, which may resume following the Supreme Court decision against a federal moratorium barring landlords from taking action against tenants during the pandemic.
Housing construction also could ease renters’ burdens. According to Census data, however, it appears that more single-family dwellings are being built than apartment units.
