RentCafe National Rent Report: The Average Apartment Rent Was $1,463 in January

Key takeaways:

• The national average rent in January 2020 was $1,463, up 3% compared to the same time last year. 
• The most expensive apartments are in Manhattan, $4,210 per month, while the lowest rents are in Wichita, KS, $662 per month.
• Of the largest renter hubs, DC apartments saw the highest net increase in rent in one year, $93, while Houston rentals saw the lowest rise in price, $16, compared to January 2019.

The January national average rent went up by 3% year-over-year

The average apartment rent reached $1,463 in January, up $43 since last year, according to apartment data from Yardi Matrix. Rents grew moderately into the new year, increasing by 3% year-over-year, the slowest pace we’ve seen in 18 months, as the seasonal winddown wears on through the winter.

Rents are likely to maintain an upward streak throughout 2020, as the number of renters continues to rise in the U.S. The demand for apartments is high, including among those renting by choice. 157% more Americans who earn over $150K per year began renting this past decade, showing a preference for a more flexible and comfort-driven lifestyle.

Check out the interactive map below to find out more about average rent prices in small, mid-sized, and large U.S. cities:

Experts foresee lifestyle will drive apartment trends in 2020

Real estate and economy experts agree that the change in Americans’ attitudes towards housing is an important factor in the evolution of the apartment industry. People of all ages are increasingly being driven by mobility and lifestyle enhancement, displaying a growing preference for amenity-rich buildings in walking distance of urban centers. Experts predict this change in housing preferences will stimulate developers and builders to deliver more apartments.

However, they also note a lack of affordable housing brought on by increasing land and labor costs in the construction industry, remarking that one of this year’s most significant challenges will be achieving a balance between delivering both quality and affordability. Click on their names to get the full expert predictions below:

Lynn Marie Burks, Ph.D.

National Dean at DeVry University and the Keller Graduate School of Management

David J. Wilk, MAI, CRE, FRICS

Assistant Professor of Finance and Director of the Real Estate Program at Temple University’s Fox School of Business

Barrington H. Branch, Sr.

Ledbetter Professor of the Practice of Real Estate Development, Scheller College of Business, Georgia Institute of Technology

Benjamin Keys, Ph.D.

Rowan Family Foundation Associate Professor and Associate Professor of Real Estate at The Wharton School, The University of Pennsylvania

80% of the largest renter hubs have rents below $2,000

16 out of the 20 largest apartment hubs have kept rental rates below the $2,000 mark in January. Two of these cities have rates below $1,000: Indianapolis and Columbus. Indianapolis apartments are the cheapest out of all urban renter hotspots, with an $887 average rate. The Indiana city offers low prices in part due to the number of apartments available in the city — occupancy rates are below the national average, which means there are more apartments for renters to snatch up. The average price to rent apartments in Columbus is $944, the second cheapest for renters, in line with expectations in a city where around 80% of the rental offer is of average and below-average quality.

When it comes to rent hikes, Phoenix, AZ takes the lead with an 8.3% increase since last year, closely followed by Las Vegas, NV, where rates grew by a lower but still significant 5.9%. Population migration explains the hikes in both cities — Phoenix and Las Vegas are among the most popular destinations for Californians looking for more affordable lifestyles, so rents are growing as the cities have to accommodate an increasing number of residents. Around the country, apartments for rent in Atlanta went for $1,477 in January, apartments in Washington, DC for $2,233 per month, and Tampa apartments rented for an average of $1,338.

Large cities: The priciest apartments are in the biggest job hubs

Manhattan, NY, ($4,210) is the most expensive to rent in, with Boston, NY ($3,462) and Brooklyn, NY ($2,936) also in the top 5, in the Northeast. San Francisco, CA and San Jose, CA, on the West Coast round up the top. The priciest large cities are all job mega-centers, with higher incomes, large numbers of renters, and high occupancy rates, explaining why residents pay top dollar to live in one of these locations. Around the country, Seattle apartments rented for $2,139 on average in January, while Chicago apartments went for $1,948 per month.

On the other end of the spectrum, large cities with the lowest rent prices are: Oklahoma City, OK, El Paso, TX, Memphis, TN, Indianapolis, IN, and Columbus, OH.

Mid-sized cities: Metro L.A. dominates the list

Most of the priciest mid-sized cities for renters are in the sprawling L.A. metro area. Long Beach’s $2,113 average rent secured its position as the second most expensive city in the category, followed by Santa Ana ($1,974). Anaheim came in fourth, with a $1,872 average apartment rate. Oakland is the most expensive among mid-sized cities, while Miami apartments come in fifth. Around the country, apartments in Raleigh were renting for $1,223, apartments in Minneapolis for $1,584 per month, and apartments in Pittsburgh for $1,237 on average.

Meanwhile, the lowest rents were registered in the following mid-sized cities: Wichita, KS, Tucson, AZ, Tulsa, OK, Albequerque, NM, and Lexington, KY.

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

Small cities: Texas boasts the lowest rents

Texas border town Brownsville ($730) is the second cheapest small city for renters in the U.S. On the opposite side of the state, Amarillo’s $754 average rent took the third spot on the podium. Military boom town Killeen is the last Texan city in the ranking, posting a $764 average price. Toledo, OH apartments are the most affordable among small cities. Independence, MO rounds up the top 5 small cities with the lowest rents in January. By comparison, Fort Lauderdale, FL apartments rented for $1,972 in January, Durham, NC apartments cost on average $1,182 per month, and Salt Lake City rentals went for $1,248.