Rent Pressure Shifts from Hot Cities to Mid-Tier Housing Markets in May

Key takeaways:

• Average rents on U.S. apartments rose by $4, or 0.3%, in May, hitting $1,316 for the month, according to Yardi Matrix.
• In terms of rent growth, California was home to eight of the 15 fastest-growing cities in the country. Stockton came in at No. 1 once again, while Sacramento rose three spots since April alone.
• Rents were just shy of $4,100 month in the nation’s most expensive rental market in May: Manhattan, New York.
• San Francisco led the pack in terms of rent decreases, with a 3.3% dip over the last 12 months. This marks the fourth month San Fran has topped the list.
• 76% of the country’s largest cities (189 cities total) saw rents increase in May, while rents flat-lined in another 45. Rent decreased in just 15 of the 250 cities we surveyed

Rents rose yet again, but just like last month – and the 13 months before that – their growth rate is gradually slowing down. May rents hits $1,316 for the month, rising a mere 0.3% since April and only 1.5% over the last year, according to data from Yardi Matrix. With the slowest growth rate we’ve seen in the last three years, the golden days for landlords may be coming to a close.

Rent growth is slowing so much, in fact, that rents have cooled off in even the nation’s hottest markets.

Average rents dropped in six out of the top 10 most expensive markets last month, including in Manhattan, San Francisco, and Boston – some of the country’s most notoriously high-priced places for renters. In another two pricey markets — California’s San Mateo and Santa Clara — they remained virtually unchanged compared to the last year. The only top 10 location to see any sort of year-over-year increase last month was Jersey City where rents edged up just 1.7% over the year.

Larger Properties Edge Up; Studios Still See Most Annual Growth

While one-, two- and three-bedroom apartments saw the most month-over-month growth, rising 0.3% since April, studio rentals saw the most annual growth once again, ticking up 2.4% year-over-year. One-bedroom apartments rose 2.2%, while two- and three-bedrooms each increased 1.9% over the year.

Bedroom Type	Average Rent	Change M-o-M	Change Y-o-Y
Studio	$1,172	0.2%	2.4%
1 Bed	$1,190	0.3%	2.2%
2 Beds	$1,394	0.3%	1.9%
3 Beds	$1,617	0.3%	1.9%

Hot Markets Cool Off; Already-Affordable Cities Plunge Lower

For the fourth month in a row, San Francisco rents saw the highest year-over-year decrease, dipping 3.3% since May 2016. Clocking in at $3,369, they’re still some of the nation’s priciest, but their consistent freefall has many wondering: are the days of ever-climbing rents finally coming to an end?

Throw in the big price decreases of costly markets like Manhattan (down 2.9% over the year); Cambridge, MA (down 1.7%); and Sunnyvale, CA (down 2%), and we’ve got a head-scratcher on our hands. Could it be apartment supply is finally catching up with demand in these ever-popular cities?

It’s true: apartment construction has boomed in the last seven years, with particular growth in California, New York, and the South. Manhattan added more than 6,000 units in the Hell’s Kitchen area alone, while Long Island saw a jump of nearly 13,000 rentals. On the West Coast, Downtown Los Angeles gained 35 new apartment buildings for a total of 7,551 units since 2010 alone. Proving the true impact this new construction is having, new units now make up 63% of DTLA’s apartment inventory.

And that impact is only going to grow. According to Doug Ressler, senior analyst at Yardi Matrix, we can expect construction to continue edging down rents even more.

“Renters have much reason to be optimistic,” Ressler said. “After a long period of incessant rent increases, rents are finally slowing down — even in some of the country’s higher-rent cities, like San Francisco and New York. Even if demand for apartment living is still robust, rent growth will continue to taper off in the coming months, mainly prompted by the record number of new apartments entering the country’s tightest markets.”

But it wasn’t just the more expensive markets that saw deceleration in May. Already-affordable places like Oklahoma City and Broken Arrow in Oklahoma, and El Paso and Corpus Christi in Texas, saw significant drops, too. Oklahoma City rents dropped 2.9% over the year, while rents in Tulsa, OK, rents decreased to a low $655 per month — less than half the national average.

U.S. Cities Where Rents Have Fallen Y-o-Y

#	City	State	Change Y-o-Y	Average Rent
1	San Francisco	CA	-3.3%	$3,369
2	Manhattan (New York City)	NY	-2.9%	$4,094
3	Oklahoma City	OK	-2.9%	$713
4	Tulsa	OK	-2.8%	$665
5	Broken Arrow	OK	-2.7%	$793
6	Sunnyvale	CA	-2.0%	$2,680
7	Oakland	CA	-1.9%	$2,420
8	Cambridge	MA	-1.7%	$2,947
9	Norman	OK	-1.6%	$864
10	College Station	TX	-1.6%	$1,192
11	Corpus Christi	TX	-1.5%	$955
12	Thornton	CO	-1.5%	$1,301
13	El Paso	TX	-1.2%	$741
14	Boston	MA	-1.1%	$3,170
15	Round Rock	TX	-1.1%	$1,097

West Coast Cities Dominate Fastest-Growing Rents List

Anomalies like San Francisco and Sunnyvale aside, California cities continued to dominate the list of fastest-growing rents. The West Coast state accounted for eight of the top 15 cities, with Stockton taking the no. 1 spot for yet another month. With a 10.6% increase over the year, the city now boasts average rents of $1,030 per month.

The California cities of Sacramento, Lancaster, Santa Rosa, Modesto, Victorville, Fairfield, and El Cajon all made the fastest-growing list. Meanwhile, other Western cities filled in the gaps. Colorado Springs, CO, came in at no. 2 with a 10.2% jump over the year, and Reno, NV; Tacoma and Spokane, WA; and Salem, OR, also made the list.

The only non-Western cities to make an appearance in our ranking were North Charleston, SC, and Buffalo, NY, which saw annual increases of 7.2% and 9.4%, respectively.

The Cities With the Fastest Growing Rents – May 2017

#	City	State	Change Y-o-Y	Average Rent
1	Stockton	CA	10.6%	$1,030
2	Colorado Springs	CO	10.1%	$1,048
3	Buffalo	NY	9.4%	$933
4	Reno	NV	8.4%	$1,041
5	Sacramento	CA	8.2%	$1,214
6	Lancaster	CA	7.9%	$1,102
7	Tacoma	WA	7.9%	$1,117
8	Santa Rosa	CA	7.8%	$1,784
9	Modesto	CA	7.7%	$1,085
10	Spokane	WA	7.5%	$870
11	Victorville	CA	7.4%	$972
12	Fairfield	CA	7.4%	$1,598
13	El Cajon	CA	7.2%	$1,391
14	North Charleston	SC	7.2%	$985
15	Salem	OR	7.1%	$935

Amarillo Makes First-Time Lowest-Rent Appearance; NY, MA, CA Rule High-Rent Rankings

To the surprise of no one, Wichita again took the no. 1 spot for lowest rents in the country. At just $633 per month, Wichita’s rent is less than half the national average. Likewise, the second and third positions remained unchanged, with Toledo, OH, and Tulsa reclaiming their spots at $661 and $665, respectively.

And although some of the remaining cities swapped places, the bulk of the country’s lowest-rent markets stayed steady for May, with the exception of one newcomer: Amarillo, TX. The city ousted former no. 10 (Memphis, TN) with a bargain-basement price of $728 per month.

On the opposite side of the spectrum, the list of highest-rent markets remained stable as well. Manhattan, San Francisco, and Boston once again took the top three spots, with rents of $4,094, $3,369, and $3,170, respectively. Five California cities made the list, including Sunnyvale, Santa Clara, San Mateo, and San Jose, while the remaining cities hailed from the Northeast — Massachusetts, New Jersey, and New York, to be more specific.

We’ve expanded our coverage for the monthly rent report to 250 cities — to be more exact, the ones that have populations over 100K and a rental stock of at least 2,800 apartments in buildings with 50 units and more.

Curious about cities like Miami, Austin, Phoenix, or Cincinnati? See where your city stands when it comes to rent growth and average rent prices by checking out this table:

City	State	Average Rent	Change M-o-M	Change Y-o-Y
Manhattan (New York City)	NY	$4,094	0.00%	-2.90%
San Francisco	CA	$3,369	0.50%	-3.30%
Boston	MA	$3,170	0.10%	-1.10%
San Mateo	CA	$3,019	-0.30%	0.00%
Cambridge	MA	$2,947	0.10%	-1.70%
Jersey City	NJ	$2,794	0.10%	1.70%
Brooklyn	NY	$2,718	0.00%	-
Sunnyvale	CA	$2,680	0.90%	-2.00%
Santa Clara	CA	$2,650	1.20%	0.40%
San Jose	CA	$2,579	0.90%	-0.20%
Daly City	CA	$2,462	0.40%	2.20%
Oakland	CA	$2,420	0.60%	-1.90%
Stamford	CT	$2,357	0.40%	0.00%
Pasadena	CA	$2,317	0.30%	1.20%
Irvine	CA	$2,313	0.30%	2.40%
Fremont	CA	$2,304	0.70%	-0.60%
Glendale	CA	$2,276	0.30%	3.30%
Los Angeles	CA	$2,226	0.80%	4.80%
Bellevue	WA	$2,088	0.60%	1.50%
Carlsbad	CA	$2,086	0.40%	1.00%
Burbank	CA	$2,060	0.00%	1.90%
Arlington	VA	$2,060	0.40%	0.00%
Washington	DC	$2,009	-0.40%	-0.80%
Thousand Oaks	CA	$2,005	0.80%	2.10%
Hayward	CA	$2,002	0.40%	2.60%
Costa Mesa	CA	$1,956	0.20%	3.10%
San Diego	CA	$1,954	0.60%	1.60%
Huntington Beach	CA	$1,929	0.20%	2.10%
Orange	CA	$1,920	0.30%	3.10%
Seattle	WA	$1,901	0.70%	3.40%
Concord	CA	$1,850	0.20%	3.10%
Long Beach	CA	$1,832	0.70%	4.40%
Simi Valley	CA	$1,816	0.50%	2.10%
Santa Ana	CA	$1,802	0.30%	4.00%
Ventura	CA	$1,792	0.10%	1.80%
Santa Rosa	CA	$1,784	0.60%	7.80%
Chicago	IL	$1,774	0.10%	0.90%
Oxnard	CA	$1,763	-0.10%	3.40%
Yonkers	NY	$1,760	0.90%	4.00%
Fort Lauderdale	FL	$1,755	-0.40%	3.10%
Fullerton	CA	$1,748	0.30%	3.10%
Boulder	CO	$1,747	0.20%	0.50%
Santa Clarita	CA	$1,743	-0.80%	-0.60%
Miramar	FL	$1,741	-0.50%	0.80%
Torrance	CA	$1,709	0.60%	5.30%
Anaheim	CA	$1,688	0.40%	5.10%
Rancho Cucamonga	CA	$1,672	0.20%	0.90%
West Covina	CA	$1,670	1.30%	5.20%
Coral Springs	FL	$1,655	1.00%	5.00%
Davie	FL	$1,653	0.00%	2.40%
Pembroke Pines	FL	$1,651	0.50%	5.60%
Alexandria	VA	$1,651	-0.10%	0.10%
Oceanside	CA	$1,645	0.30%	3.30%
Vista	CA	$1,640	0.60%	1.40%
Garden Grove	CA	$1,630	0.50%	4.70%
Vallejo	CA	$1,615	0.40%	1.10%
Fairfield	CA	$1,598	0.40%	7.40%
Chula Vista	CA	$1,580	0.30%	3.50%
Miami	FL	$1,578	-0.40%	2.80%
New Haven	CT	$1,563	0.60%	2.80%
Ontario	CA	$1,558	0.20%	4.80%
Corona	CA	$1,554	0.80%	5.40%
Murrieta	CA	$1,547	1.20%	6.50%
Salinas	CA	$1,529	1.20%	5.20%
Renton	WA	$1,515	0.70%	1.20%
Temecula	CA	$1,503	0.70%	4.60%
Edison	NJ	$1,498	0.40%	2.60%
Roseville	CA	$1,487	0.40%	2.10%
Santa Maria	CA	$1,484	1.20%	6.30%
Philadelphia	PA	$1,470	0.00%	1.30%
Hillsboro	OR	$1,456	0.60%	0.30%
Denver	CO	$1,453	0.10%	0.30%
Escondido	CA	$1,452	0.30%	5.70%
Pomona	CA	$1,450	0.10%	5.90%
Portland	OR	$1,443	0.60%	0.30%
Minneapolis	MN	$1,433	0.30%	4.10%
Naperville	IL	$1,423	0.60%	2.90%
Ann Arbor	MI	$1,403	-0.10%	2.50%
El Cajon	CA	$1,391	0.60%	7.20%
Riverside	CA	$1,376	0.30%	4.40%
Lakewood	CO	$1,374	0.30%	0.30%
Moreno Valley	CA	$1,340	-0.10%	5.30%
Sandy Springs	GA	$1,339	0.30%	0.40%
Fort Collins	CO	$1,329	-0.20%	-0.80%
Westminster	CO	$1,327	0.50%	-0.10%
Atlanta	GA	$1,324	0.50%	2.80%
Kent	WA	$1,319	0.50%	4.40%
West Palm Beach	FL	$1,312	0.00%	4.50%
Thornton	CO	$1,301	0.20%	-1.50%
Hollywood	FL	$1,300	1.30%	3.60%
Frisco	TX	$1,296	-0.10%	0.60%
Everett	WA	$1,291	0.50%	3.10%
Austin	TX	$1,288	-0.20%	-0.60%
Scottsdale	AZ	$1,285	0.20%	4.20%
Richardson	TX	$1,280	-0.20%	3.30%
Pearland	TX	$1,272	0.00%	-0.60%
Pompano Beach	FL	$1,255	-0.40%	3.50%
Aurora	IL	$1,253	0.20%	3.00%
Hialeah	FL	$1,248	0.60%	4.70%
Nashville	TN	$1,248	0.20%	2.80%
Arvada	CO	$1,245	0.20%	1.70%
Charleston	SC	$1,244	1.00%	4.70%
Plano	TX	$1,242	0.10%	0.30%
Orlando	FL	$1,235	0.40%	2.20%
Aurora	CO	$1,218	0.00%	-0.40%
Eugene	OR	$1,217	1.30%	6.70%
Manchester	NH	$1,216	-0.20%	2.40%
Sacramento	CA	$1,214	0.50%	8.20%
Baltimore	MD	$1,197	0.70%	2.30%
McKinney	TX	$1,194	0.10%	0.40%
College Station	TX	$1,192	-1.00%	-1.60%
Tempe	AZ	$1,191	0.30%	4.10%
Vancouver	WA	$1,187	0.60%	4.30%
Gresham	OR	$1,176	0.20%	2.50%
Madison	WI	$1,170	-0.30%	1.80%
Tampa	FL	$1,168	-0.10%	3.80%
Fontana	CA	$1,164	0.20%	6.60%
Hartford	CT	$1,162	0.00%	0.90%
St. Petersburg	FL	$1,156	-0.50%	2.20%
Rialto	CA	$1,153	0.10%	4.40%
Chesapeake	VA	$1,139	0.10%	0.30%
Tallahassee	FL	$1,135	0.60%	3.80%
Carrollton	TX	$1,125	-0.30%	2.50%
Pittsburgh	PA	$1,121	0.40%	1.60%
Cary	NC	$1,120	0.50%	2.10%
Virginia Beach	VA	$1,120	0.70%	0.00%
Tacoma	WA	$1,117	0.40%	7.90%
Charlotte	NC	$1,113	0.00%	2.00%
Midland	TX	$1,112	2.20%	6.70%
Denton	TX	$1,112	0.20%	1.80%
Dallas	TX	$1,107	-0.10%	2.90%
Elizabeth	NJ	$1,107	0.40%	2.20%
Gainesville	FL	$1,105	0.10%	3.40%
Lancaster	CA	$1,102	0.40%	7.90%
Lewisville	TX	$1,102	-0.20%	1.50%
Newark	NJ	$1,100	0.00%	1.00%
New Orleans	LA	$1,098	0.50%	1.90%
Round Rock	TX	$1,097	0.30%	-1.10%
Raleigh	NC	$1,096	0.70%	2.60%
Chandler	AZ	$1,096	0.20%	2.40%
Clearwater	FL	$1,094	-0.10%	3.10%
Salt Lake City	UT	$1,087	0.30%	6.60%
Modesto	CA	$1,085	0.30%	7.70%
San Bernardino	CA	$1,084	0.20%	3.50%
Gilbert	AZ	$1,083	0.30%	3.30%
Milwaukee	WI	$1,083	0.30%	1.40%
Brandon	FL	$1,080	0.30%	0.70%
Irving	TX	$1,075	0.00%	2.50%
Henderson	NV	$1,071	0.40%	2.00%
West Jordan	UT	$1,057	0.90%	4.40%
Colorado Springs	CO	$1,048	1.20%	10.10%
West Valley City	UT	$1,045	0.60%	5.40%
Houston	TX	$1,044	-0.10%	-0.30%
Reno	NV	$1,041	1.30%	8.40%
Durham	NC	$1,040	0.90%	1.90%
Baton Rouge	LA	$1,035	-1.00%	3.00%
Stockton	CA	$1,030	0.30%	10.60%
Wilmington	NC	$1,024	0.10%	4.20%
Murfreesboro	TN	$1,022	0.30%	2.40%
Norfolk	VA	$1,021	0.70%	1.30%
Savannah	GA	$1,019	1.10%	5.20%
Fort Worth	TX	$1,012	0.20%	4.20%
Overland Park	KS	$1,007	-0.30%	1.80%
Greeley	CO	$1,006	0.30%	0.80%
Syracuse	NY	$1,000	0.20%	0.90%
Peoria	AZ	$986	0.30%	5.50%
Grand Prairie	TX	$986	0.10%	2.70%
North Charleston	SC	$985	0.10%	7.20%
Hampton	VA	$982	0.60%	1.80%
Cleveland	OH	$977	0.00%	3.00%
Clovis	CA	$976	0.30%	4.40%
Richmond	VA	$976	0.50%	2.00%
Victorville	CA	$972	0.50%	7.40%
Columbia	SC	$971	-0.30%	2.30%
Odessa	TX	$970	2.60%	5.90%
Jacksonville	FL	$970	0.50%	2.30%
Boise	ID	$967	1.20%	6.90%
San Antonio	TX	$967	-0.20%	0.90%
Corpus Christi	TX	$955	0.20%	-1.50%
Knoxville	TN	$951	1.00%	5.10%
Rochester	NY	$951	0.20%	3.30%
Detroit	MI	$939	0.00%	6.00%
Waco	TX	$938	-0.20%	4.80%
Fresno	CA	$938	0.30%	4.60%
Lakeland	FL	$937	0.20%	0.30%
Salem	OR	$935	0.60%	7.10%
Buffalo	NY	$933	0.20%	9.40%
Arlington	TX	$933	0.60%	6.30%
Garland	TX	$932	0.10%	3.30%
Grand Rapids	MI	$919	0.30%	2.00%
Lubbock	TX	$918	-0.40%	0.30%
Mesquite	TX	$917	-0.20%	4.60%
Kansas City	MO	$917	0.20%	3.10%
Chattanooga	TN	$916	1.10%	3.60%
Bakersfield	CA	$913	0.40%	2.40%
Las Vegas	NV	$911	0.30%	3.80%
Birmingham	AL	$910	0.20%	1.60%
Cincinnati	OH	$907	0.20%	0.60%
Phoenix	AZ	$902	0.30%	3.70%
Newport News	VA	$899	0.70%	1.00%
North Las Vegas	NV	$898	0.20%	1.00%
Lincoln	NE	$885	0.30%	0.70%
Olathe	KS	$881	0.10%	4.80%
Louisville	KY	$881	0.10%	3.40%
Waterbury	CT	$881	0.00%	1.60%
Spokane	WA	$870	0.70%	7.50%
Lexington	KY	$869	1.20%	3.20%
Metairie	LA	$865	-0.20%	1.20%
Norman	OK	$864	-0.50%	-1.60%
Mesa	AZ	$862	0.20%	2.40%
South Bend	IN	$859	0.10%	4.10%
St. Louis	MO	$859	0.10%	-0.20%
Omaha	NE	$854	0.60%	1.10%
Columbus	OH	$853	0.50%	2.60%
Des Moines	IA	$838	0.70%	4.90%
Columbus	GA	$837	0.00%	1.30%
Sterling Heights	MI	$835	-0.20%	0.20%
Pasadena	TX	$827	-0.10%	5.90%
Glendale	AZ	$824	0.10%	2.70%
Greensboro	NC	$823	0.40%	2.10%
Albuquerque	NM	$813	0.00%	2.40%
Indianapolis	IN	$808	0.40%	3.10%
Akron	OH	$801	-0.40%	2.00%
Broken Arrow	OK	$793	0.50%	-2.70%
Mobile	AL	$792	0.30%	1.50%
Paradise	NV	$791	0.50%	3.80%
Winston-Salem	NC	$776	0.40%	5.00%
Tucson	AZ	$776	0.50%	4.30%
Little Rock	AR	$773	-0.30%	1.20%
McAllen	TX	$772	1.00%	-0.10%
Kansas City	KS	$765	0.30%	2.30%
Macon	GA	$762	-0.70%	1.60%
Augusta	GA	$760	0.00%	1.20%
Las Cruces	NM	$759	0.30%	2.70%
Lansing	MI	$758	0.00%	0.40%
Warren	MI	$754	0.10%	1.20%
High Point	NC	$753	0.30%	1.20%
Jackson	MS	$750	0.00%	3.00%
El Paso	TX	$741	0.10%	-1.20%
Memphis	TN	$733	0.40%	1.20%
Amarillo	TX	$728	-0.50%	-0.70%
Dayton	OH	$725	0.00%	1.80%
Oklahoma City	OK	$713	-0.40%	-2.90%
Independence	MO	$709	0.00%	2.80%
Fort Wayne	IN	$701	0.90%	2.60%
Killeen	TX	$696	-0.30%	0.60%
Brownsville	TX	$692	-1.30%	1.30%
Tulsa	OK	$665	-0.30%	-2.80%
Toledo	OH	$661	-0.30%	0.50%
Wichita	KS	$633	0.50%	1.40%

About RentCafe and How We Compiled the Data

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 250 largest cities in the US. The report is exclusively based on apartment data related to buildings containing 50 or more units.

Rent data was provided by Yardi Matrix, an apartment market intelligence source and RentCafe’s sister company which researches and reports on all multifamily properties of 50+ units across 124 markets in the United States, as well as office, industrial, and self storage properties. 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 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 121 markets across the U.S., as reported by Yardi Matrix.