Rents in the South Continue to Rise as February Increases Impact 92% of U.S. Cities

Key takeaways:

• The national average rent reached an all-time high of $1,426 in February 2019, up by 3.6% ($49) year-over-year, according to data from Yardi Matrix.
• Of the nation’s 253 largest cities, 92% have seen rent increases compared to February 2018, 6% of cities flatlined, and 2% have registered apartment prices decrease.
• Rents in the South continue to feel the heat, especially in Nevada, Arizona, California, and Texas.

The February national average rent is up by 3.6% over the year

Rent prices experienced a 3.6% y-o-y change that could set the residential rental market up for another impressive season, with the average national rent reaching $1,426/month in February. Compared to last year’s figure, the average monthly rent nationwide is $49 higher following a slight 0.1% m-o-m ($2) increase – a small boost consistent with market trends this time of the year.

Residential rent prices in the nation’s largest hubs continue to witness rapid growth

Of the top 20 largest U.S. renter hubs, rent in Phoenix witnessed the sharpest increase over the past 12-month period, 8.6%, reaching $1,037. Hot on its heels is Las Vegas with an 8.1% y-o-y growth that got February rent prices in Sin City to $1,051.

Los Angeles renters’ pockets took the biggest hit with a net increase of $136 compared to 12 months ago, taking LA average rent prices closer to the $2,500 mark. Renters in Chicago, IL are next in line with an $85 net change that took the average rent price from $1,813 last year to $1,898. The weakest net growth happened in Houston, TX (0.8%), where the average rent of $1,094 is just $9 above last year’s average, while San Antonio, TX (3.6%) and Columbus, OH (4%) average rents are $35 above last year’s average.

According to Doug Ressler, Director of Business Intelligence at Yardi Matrix, the South and Southwest housing markets continue to change as a result of the job market strengthening. Tremendous job growth and in-migration brought increased attention to multifamily markets in Nevada, Arizona, and Texas. The markets there have become attractive based on a healthy pace of job formation, stable interest rates, and a steady burn-off of concessions.

Boise sees the biggest m-o-m growth, St. Louis and Philly lead m-o-m increases in mid-sized and large cities

The 10 largest month-over-month increases around the country are claimed by small cities, but being voted 2019’s best city to live in may be what set Boise, ID apart this early in the year. Having registered an 8.3% growth compared to last February, the average rent in the small city was pushed to an affordable $1,129. What further sets it apart is that, with a 2.2% m-o-m average growth, the City of Trees is the only place in the United States where m–o-m increases exceeded 2%.

Over the past 12-month period, Philadelphia, PA experienced a modest 4.4% boost. However, out of all the largest U.S. cities, Philly is the city that saw the biggest m-o-m increase of 1.1%, taking the average figure from $1,575 to $1,592 in the span of a month. When it comes to medium-sized cities, the city of St. Louis experienced the largest m-o-m rent increase, 1%, although its average rent of $923 after a 4.3% y-o-y increase is not something exceptional.

Rent prices in large cities like Phoenix, Las Vegas, and LA continue to accelerate

Compared to January, Phoenix and Las Vegas essentially swapped places for highest and second-highest rent increases. This month is Phoenix, AZ‘s turn to experience a faster increase in rent than any other large American city — 8.6% y-o-y, which amounts to $82 added to the average rent, reaching $1,037. Apartments in Las Vegas, NV go for $1,051/month after an 8.1% increase, $79 more compared to February 2018.

Rapid increases in rent also occurred in Jacksonville, FL (6%), where the average rent is $1,063, $60 more than a year ago. Well above the national average prices, Los Angeles, CA renters have to pay $136 (5.8%) more to keep up with an average rent of $2,463.

Memphis, TN and Austin, TX round up the top 5 large cities with fastest rising rents with an average increase of 5.3%. However, this percentage paints a different picture for renters in the two cities, as renters in Memphis pay a monthly rent of $788, while renters in Austin pay on average twice as much, $1,369.

Rents in Queens, NY (-1.7%), Houston, TX (0.8%), and Baltimore, MD (2%) continue to experience the weakest increases. Rents in Manhattan are picking up the pace, growing at a rate of 2.1%, a slight increase after a period of stagnation, bringing the monthly average in the expensive NYC borough to $4,113 per month. A 2.1% y-o-y increase in Portland, OR translates into $1,480 in average rent, a net increase of $30 compared to February 2018.

Medium-sized cities in California and Arizona lead the pack in rent increases

Mesa, AZ is the disruptor in a national top 5 otherwise dominated by smaller cities. With a 10.6% growth, the average rent in Mesa, AZ has seen the sharpest increase among mid-sized cities,  hitting the $1,000 mark and reaching $1,009. Apartments in Riverside, CA have registered year-over-year price increases of 7.2%, meaning rents in the City of Arts & Innovation is $1,538.

Rent in Long Beach, CA reached $2,006 following a 6.9% y-o-y increase, while Fresno, CA saw a 6.8% growth, getting the average rent at $1,059. Renters pay 6.6% more for rent in Tucson, AZ, where the average rent reached a comfortable $856, but California continues to dominate the list with Bakersfield (6%), Sacramento (5.9%), and finally, Stockton (5.5%).

See the complete list of cities at the end of this report.

With the exception of  Corpus Christi, TX, all the other names in the top 5 for weakest rent increases in February are mid-size Midwest cities. Year-over-year rent prices continue to lull in Wichita, KS, where a 1.6% increase accounts for an average of $643 a month. Corpus Christi experienced the second-slowest growth, with rent reaching $965 after a 1.7% increase. The average rent in both Kansas City, MO ($979), and Tulsa, OK ($785) increased by 1.8% since last February, while apartments in Minneapolis, MN had a modest 2.6% rent boost leading to an average of $1,551 in February.

Small cities continue to claim the largest rent increases in the U.S. in February

Rents in Midland, TX (16.3%) and Odessa, TX (12.8%) continue their monthly national surge, with both small Texas cities seeing the fastest rent growth in the country. This means that, compared to 12 months ago, renters in Midland struggle with an additional $223, while those in Odessa need $157 more to cover monthly average rent.

Arizona provides the third- and fourth-fastest rent growths among small U.S. cities, with Chandler and Glendale witnessing 10.5% and 9.9% increase in average rent, respectively. Wrapping up the top is the first Nevada representative on the list, Henderson, where rent prices climbed after a 9.5% y-o-y rise, with the average of $1,261, followed by Reno (9.1%) in sixth place with an average February rent of $1,237.

The top 10 most expensive and least expensive rent prices in the U.S.

The national top of most expensive cities remains unchanged, with Manhattan still claiming the first position of all 253 cities surveyed with a $4,113 average. Sitting at a $3,607 monthly average, San Francisco is runner up and Boston comes in third with $3,325, while San Mateo, CA and Cambridge, MA complete the list of cities where average rent prices go for more than $3,000.

Wichita, KS continues to boast the most affordable rent in the country at $643, followed by Tulsa, OK at $685. The rest of the national top of cheapest rents stays relatively unchanged, with rent prices in cities like Toledo, OH, Independence, MO, or Fort Wayne, IN remaining in the $700 range.

Check the average price of rent in your city by using this interactive table:

[mailmunch-form id=”583374″]

Methodology:

RentCafe is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the United States.

To compile this report, RentCafe’s research team analyzed rent data across the 253 largest cities in the US. The report is exclusively based on apartment data related to buildings containing 50 or more units. Our report includes cities with populations over 100,000 and a rental stock of at least 2,900 apartments in 50+ unit buildings.

In this report, large cities are cities with a population of 600,000 people or more, mid-sized cities are cities with a population between 300,000 and 600,000, and small cities are cities with a population of less than 300,000.

Rent data was provided by Yardi Matrix, a business development and asset management tool for brokers, sponsors, banks and equity sources underwriting investments in the multifamily, office, industrial and self-storage sectors. Rental rate coverage is for Market Rate properties only. Fully Affordable properties are not included in the Yardi Matrix rental surveys and are not reported in rental rate averages.

Starting with the January 2017 rent survey, Yardi Matrix is using a methodology that incorporates more properties into the sample which caused slight changes in overall rents and year-over-year changes compared to the previous reports. We expect this methodology adjustment to produce more accurate averages at the national and metro levels.

*National averages include over 130 markets across the U.S., as reported by Yardi Matrix.