Where US rents are rising and falling the fastest

While pandemic-era rent inflation has largely subsided for ordinary Americans, apartment prices have soared in many major US cities over the past year.

For example, monthly rents for one- and two-bedroom apartments on the market in Syracuse, New York have increased the most compared to other major cities, rising 29% and 25%, respectively, since June 2023, according to data from Zumper’s National Rent Report.

Zumper analyzed the average asking rents for apartments in the 100 most populous U.S. cities.

Other major cities, including Lincoln, Nebraska; Chicago; Buffalo, New York; Madison, Wisconsin; Rochester, New York; and New York City, have also seen rents for one- and two-bedroom apartments increase by at least 10%, according to Zumper.

In contrast, renters in other cities are feeling relieved.

The analysis found that asking rents for one-bedroom apartments fell by at least 5 percent in Oakland, California; Memphis and Chattanooga, Tennessee; Cincinnati, Ohio; Colorado Springs, Colorado; Irving, Texas; Jacksonville, Florida; and Raleigh, Greensboro and Durham, North Carolina.

By comparison, national prices for one- and two-bedroom apartments have increased by 1.5% and 2.1%, respectively, since June 2023, Zumper found.

New York was found to be the most expensive city for renters, with the typical renter paying $4,300 a month for a one-bedroom apartment.

By comparison, in Akron, Ohio, and Wichita, Kansas, the two cheapest big cities for rent, renters pay $730 a month for a one-bedroom apartment.

Analyst Crystal Chen, who wrote the Zamper analysis, said broadly speaking, rent inflation is driven by demand and supply dynamics.

Essentially, in areas where rents are rising rapidly, demand for apartments is outstripping supply, while areas where rents are falling have an increasing inventory of apartments.

For example, New York City’s apartment vacancy rate recently fell to 1.4%, the lowest level since the 1960s, according to the Department of Housing Preservation and Development, which said the vacancy rate had “plummeted” from 4.5% just two years earlier.

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“The data is clear: The demand to live in our city far outstrips our ability to build housing,” New York City Mayor Eric Adams said in a statement about the vacancy rate.

Rising rents can be a financial problem for households.

In May, the typical renter spent nearly 30% of their income on a new rental property, according to Zillow.

That’s down from a recent peak of nearly 31% in June 2022, but remains above the roughly 28% that was typical before the pandemic, according to Zillow data.

About 86% of New York City’s lowest-income residents (those making less than $25,000 a year) are severely rent burdened, according to the New York City Department of Housing Preservation and Development. The growing financial burden has led to an “alarming increase in unpaid and delinquent rent payments” compared to 2021, the department said.

Rising rents could have other knock-on effects.

For example, it could limit potential homebuyers’ ability to save for a down payment, “pushing them out of the housing market,” Fitch said in its global housing market outlook.

Rent inflation plummeted in the early days of the COVID-19 pandemic.

Chen said that with “almost everyone” confined to their homes during the health crisis, digital nomads, no longer needing to work in a physical office, have left cities in favor of suburban and outdoor spaces.

However, return-to-office policies and people returning to big cities have caused rents to soar from 2022 to 2023, Chen said.

Annual rent inflation had generally hovered between 3% and 4% for several years prior to the pandemic, peaking at around 9% in early 2023. Since then, rent inflation has gradually declined, to around 5% in May, according to the Consumer Price Index data.