This jump reflects the largest annual increase since February 2020.
Asking multifamily rents rose a staggering 15% in January nationwide to an average of $1,891, according to new research from Redfin, a jump that reflects the largest annual increase since February 2020. Rents were up 0.7% month over month and 15.2% year over year.
The national median monthly mortgage payment for buyers also climbed 25% year-over-year to $1,595. That’s also the biggest increase Redfin has noted since the firm began tracking such data. Payments are up 3% over December figures.
“Moving right now is expensive, whether you’re renting or buying,” said Redfin Chief Economist Daryl Fairweather. “One of the only ways to avoid high housing costs is to move somewhere cheaper, but the list of places that are truly inexpensive is shrinking. Rising mortgage rates are squeezing more Americans out of the for-sale market, which will likely put increasing pressure on rents in the coming months.”
Portland, Austin, and Newark lead the US as metros with the fastest-rising year over year rents, with increases of 39%, 35%, and 33%, respectively. Rounding out the top ten are Nassau County, New York; New York City; New Brunswick, NJ; Tampa; Fort Lauderdale; West Palm Beach; and Miami. Every market in the top 10 had rent growth of 31% or more over 2020 figures.
Just two metro areas Redfin tracks saw rents fall in January over prior year figures: Kansas City, Mo., and Milwaukee.
Rents are expected to continue to climb in 2022: the National Association of Realtors predicts that “even if net absorption is normalizing, absorption (demand) is still outpacing deliveries (supply) across all classes of apartments.
Vacancy also remains tight, especially for Class B and C units, according to NAR economist Scholastica Gay Cororaton.
“Amid elevated inflation, rents will continue to rise strongly in 2022 although at below double-digit pace,” she predicts in a recent analysis.
US Census Bureau data shows that the rental vacancy rate hit 5.6% in 2021 Q4, the lowest rate in nearly four decades. And Costar data tracking just multifamily units estimates the rate to be closer to 4.5%