This Bay Area City Has the Most Expensive Rentals in the Country

By Anna Bahn, CNN Business

(CNN) — Monthly rent costs hit a new high in February, with the typical apartment now $283 more expensive each month than it was two years ago, before the start of the pandemic.

According to a report from Realtor.com, the national average rent was $1,792 last month, up 17% from a year ago. The rents for studio apartments, one bedroom and two bedroom have seen double digit growth in the last one year.

After slashing rents in some of the biggest cities during the pandemic, February posted a double-digit percentage increase for the seventh straight month.

Danielle Hale, chief economist at Realtor.com, said, “With rents increasing by about 20% over the past two years, rental prices are likely to remain high, but we expect some cooling off the recent acceleration. “

In some cities, the rent increase has been staggering. According to the report, Miami saw the fastest growth, with the average rental price rising 55% in February, making it the least affordable market among the top 50 cities.

Cities seeing the lowest rent increases were Cleveland, Minneapolis and Detroit, with rents rising just 6% or less in February from a year earlier.

San Jose, California, is the most expensive place to rent, with an average rent of $3,024 per month, followed by San Diego, Los Angeles, San Francisco, Miami, and New York City.

“With rents rising across the country, February’s data indicates many renters’ budgets may be stretched beyond affordability limits,” Hale said.

Sun Belt fares growing the fastest

The Sun Belt continues to attract new residents due to its relative affordability, attractive lifestyle and increased ability to work remotely. As a result, all 10 fastest growing rental markets are in the US Southern tier, including four in Florida.

After Miami, the cities with the biggest annual rent jumps were Orlando and Tampa, Florida; Austin, Texas; San Diego; Las Vegas; Phoenix; Jacksonville, Florida; Memphis, Tennessee; and San Antonio, Texas — all with rent increases of 23% or more.

The rent increase is being driven by an increase in demand, especially from younger renters, of whom there may be many price out According to the report, to buy a house.

buy starter though Home is more affordable than renting In a city like Miami, the report showed, home prices are rising and mortgage rates are climbing, with purchase prices up 31.6% in February from a year ago.

“In light of the growing economic uncertainties and conflict in Ukraine, some households would prefer to buy in an attempt to lock in massive fixed monthly payments as a hedge against further inflation,” Hale said. “But growing fast” mortgage rates And the still limited number of homes for sale may mean that some buyers can live with the flexibility to rent. With rental demand already exceeding supply, rental affordability will continue to be a challenge.”

Rent taking the bulk of the income

A general rule of thumb is to keep monthly housing costs at 30% or less of monthly income. But even though wages are rising in some industries, rents are high – and are taking up a substantial portion of monthly income.

Based on a Realtor.com analysis, the Sun Belt cities experiencing strong inbound migration are the least affordable places to rent.

As the least affordable city to rent, Miami’s median rent is $2,929 per month, taking in about 60% of the average monthly income, placing a heavy cost burden on renters.

Rental share of income was over 30% in 14 of the top 50 cities, including Los Angeles, where rents accounted for 46% of monthly income; It is followed by Riverside, California, at 45.9% and Tampa, Florida, at 44.7%.

Meanwhile, cities determined to be most affordable were places where rents were rising, but not eating up more than 30% of the median income. The analysis found that Kansas City was the most affordable city to rent. Although rents rose 11% in February from a year earlier, the average rent of $1,216 per month ate up only 20% of median income. Other affordable cities included Oklahoma City, Denver, St. Louis and Washington, DC.

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