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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 – Cali’s San Mateo and Santa Clara – they remained virtually unchanged over the last year. The only top 10 city 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-bedrooms rose 2.2%, while two- and three bedrooms each increased 1.9% over the year.

Bedroom TypeAverage RentChange M-o-MChange Y-o-Y
Studio$1,1720.2%2.4%
1 Bed$1,1900.3%2.2%
2 Beds$1,3940.3%1.9%
3 Beds$1,6170.3%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, Massachusetts (down 1.7%); and Sunnyvale, California (down 2%), and we’ve got a head-scratcher on our hands. Could it be apartment supply is finally catching up to 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 gained more than 6,000 units in the Hell’s Kitchen area alone, while Long Island saw a jump of nearly 13,000. On the West Coast, Downtown Los Angeles gained 35 new apartment buildings and 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, Oklahoma, and El Paso and Corpus Christi, Texas, saw significant drops, too. Oklahoma City rents dropped 2.9% over the year, while Tulsa’s crept to a low $655 per month — less than half the national average.

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

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

Cali’s Sacramento, Lancaster, Santa Rosa, Modesto, Victorville, Fairfield, and El Cajon all made the fastest-growing list, while other Western cities filled in the gaps. Colorado Springs came in at No. 2 with a 10.2% jump over the year. Reno, Nevada; Tacoma and Spokane, Washington; and Salem, Oregon, also made the list. The only non-Western cities to make an appearance were North Charleston, South Carolina, and Buffalo, New York, which saw 7.2% and 9.4% annual increases, respectively.

The Cities with the Fastest Growing Rents – May 2017

#CityStateChange Y-o-YAverage Rent
1StocktonCA10.6%$1,030
2Colorado SpringsCO10.1%$1,048
3BuffaloNY9.4%$933
4RenoNV8.4%$1,041
5SacramentoCA8.2%$1,214
6LancasterCA7.9%$1,102
7TacomaWA7.9%$1,117
8Santa RosaCA7.8%$1,784
9ModestoCA7.7%$1,085
10SpokaneWA7.5%$870
11VictorvilleCA7.4%$972
12FairfieldCA7.4%$1,598
13El CajonCA7.2%$1,391
14North CharlestonSC7.2%$985
15SalemOR7.1%$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 a month, Wichita’s rent is less than half the national average. The No. 2 and No. 3 cities remained the same, too, with Toledo and Tulsa reclaiming their spots at $661 and $665, respectively. Though 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, Texas. The city ousted former No. 10 Memphis 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 specifically.

Top 10 Cities with the Highest Rents - May 2017

CityStateAverage Rent
ManhattanNY$4,094
San FranciscoCA$3,369
BostonMA$3,170
San MateoCA$3,019
CambridgeMA$2,947
Jersey CityNJ$2,794
BrooklynNY$2,718
SunnyvaleCA$2,680
Santa ClaraCA$2,650
San JoseCA$2,579

Top 10 Cities with the Lowest Rents - May 2017

CityStateAverage Rent
WichitaKS$633
ToledoOH$661
TulsaOK$665
BrownsvilleTX$692
KilleenTX$696
Fort WayneIN$701
IndependenceMO$709
Oklahoma CityOK$713
DaytonOH$725
AmarilloTX$728

We’ve expanded our coverage for the monthly rent report to 250 cities – specifically the ones that have populations over 100K and a rental stock of at least 2,800 apartments in 50+ unit buildings.

See where your city stands when it comes to rent growth and average rent prices by checking out this table:

CityStateAverage RentChange M-o-MChange Y-o-Y
Manhattan (New York City)NY$4,0940.0%-2.9%
San FranciscoCA$3,3690.5%-3.3%
BostonMA$3,1700.1%-1.1%
San MateoCA$3,019-0.3%0.0%
CambridgeMA$2,9470.1%-1.7%
Jersey CityNJ$2,7940.1%1.7%
BrooklynNY$2,7180.0%-
SunnyvaleCA$2,6800.9%-2.0%
Santa ClaraCA$2,6501.2%0.4%
San JoseCA$2,5790.9%-0.2%
Daly CityCA$2,4620.4%2.2%
OaklandCA$2,4200.6%-1.9%
StamfordCT$2,3570.4%0.0%
PasadenaCA$2,3170.3%1.2%
IrvineCA$2,3130.3%2.4%
FremontCA$2,3040.7%-0.6%
GlendaleCA$2,2760.3%3.3%
Los AngelesCA$2,2260.8%4.8%
BellevueWA$2,0880.6%1.5%
CarlsbadCA$2,0860.4%1.0%
BurbankCA$2,0600.0%1.9%
ArlingtonVA$2,0600.4%0.0%
WashingtonDC$2,009-0.4%-0.8%
Thousand OaksCA$2,0050.8%2.1%
HaywardCA$2,0020.4%2.6%
Costa MesaCA$1,9560.2%3.1%
San DiegoCA$1,9540.6%1.6%
Huntington BeachCA$1,9290.2%2.1%
OrangeCA$1,9200.3%3.1%
SeattleWA$1,9010.7%3.4%
ConcordCA$1,8500.2%3.1%
Long BeachCA$1,8320.7%4.4%
Simi ValleyCA$1,8160.5%2.1%
Santa AnaCA$1,8020.3%4.0%
VenturaCA$1,7920.1%1.8%
Santa RosaCA$1,7840.6%7.8%
ChicagoIL$1,7740.1%0.9%
OxnardCA$1,763-0.1%3.4%
YonkersNY$1,7600.9%4.0%
Fort LauderdaleFL$1,755-0.4%3.1%
FullertonCA$1,7480.3%3.1%
BoulderCO$1,7470.2%0.5%
Santa ClaritaCA$1,743-0.8%-0.6%
MiramarFL$1,741-0.5%0.8%
TorranceCA$1,7090.6%5.3%
AnaheimCA$1,6880.4%5.1%
Rancho CucamongaCA$1,6720.2%0.9%
West CovinaCA$1,6701.3%5.2%
Coral SpringsFL$1,6551.0%5.0%
DavieFL$1,6530.0%2.4%
Pembroke PinesFL$1,6510.5%5.6%
AlexandriaVA$1,651-0.1%0.1%
OceansideCA$1,6450.3%3.3%
VistaCA$1,6400.6%1.4%
Garden GroveCA$1,6300.5%4.7%
VallejoCA$1,6150.4%1.1%
FairfieldCA$1,5980.4%7.4%
Chula VistaCA$1,5800.3%3.5%
MiamiFL$1,578-0.4%2.8%
New HavenCT$1,5630.6%2.8%
OntarioCA$1,5580.2%4.8%
CoronaCA$1,5540.8%5.4%
MurrietaCA$1,5471.2%6.5%
SalinasCA$1,5291.2%5.2%
RentonWA$1,5150.7%1.2%
TemeculaCA$1,5030.7%4.6%
EdisonNJ$1,4980.4%2.6%
RosevilleCA$1,4870.4%2.1%
Santa MariaCA$1,4841.2%6.3%
PhiladelphiaPA$1,4700.0%1.3%
HillsboroOR$1,4560.6%0.3%
DenverCO$1,4530.1%0.3%
EscondidoCA$1,4520.3%5.7%
PomonaCA$1,4500.1%5.9%
PortlandOR$1,4430.6%0.3%
MinneapolisMN$1,4330.3%4.1%
NapervilleIL$1,4230.6%2.9%
Ann ArborMI$1,403-0.1%2.5%
El CajonCA$1,3910.6%7.2%
RiversideCA$1,3760.3%4.4%
LakewoodCO$1,3740.3%0.3%
Moreno ValleyCA$1,340-0.1%5.3%
Sandy SpringsGA$1,3390.3%0.4%
Fort CollinsCO$1,329-0.2%-0.8%
WestminsterCO$1,3270.5%-0.1%
AtlantaGA$1,3240.5%2.8%
KentWA$1,3190.5%4.4%
West Palm BeachFL$1,3120.0%4.5%
ThorntonCO$1,3010.2%-1.5%
HollywoodFL$1,3001.3%3.6%
FriscoTX$1,296-0.1%0.6%
EverettWA$1,2910.5%3.1%
AustinTX$1,288-0.2%-0.6%
ScottsdaleAZ$1,2850.2%4.2%
RichardsonTX$1,280-0.2%3.3%
PearlandTX$1,2720.0%-0.6%
Pompano BeachFL$1,255-0.4%3.5%
AuroraIL$1,2530.2%3.0%
HialeahFL$1,2480.6%4.7%
NashvilleTN$1,2480.2%2.8%
ArvadaCO$1,2450.2%1.7%
CharlestonSC$1,2441.0%4.7%
PlanoTX$1,2420.1%0.3%
OrlandoFL$1,2350.4%2.2%
AuroraCO$1,2180.0%-0.4%
EugeneOR$1,2171.3%6.7%
ManchesterNH$1,216-0.2%2.4%
SacramentoCA$1,2140.5%8.2%
BaltimoreMD$1,1970.7%2.3%
McKinneyTX$1,1940.1%0.4%
College StationTX$1,192-1.0%-1.6%
TempeAZ$1,1910.3%4.1%
VancouverWA$1,1870.6%4.3%
GreshamOR$1,1760.2%2.5%
MadisonWI$1,170-0.3%1.8%
TampaFL$1,168-0.1%3.8%
FontanaCA$1,1640.2%6.6%
HartfordCT$1,1620.0%0.9%
St. PetersburgFL$1,156-0.5%2.2%
RialtoCA$1,1530.1%4.4%
ChesapeakeVA$1,1390.1%0.3%
TallahasseeFL$1,1350.6%3.8%
CarrolltonTX$1,125-0.3%2.5%
PittsburghPA$1,1210.4%1.6%
CaryNC$1,1200.5%2.1%
Virginia BeachVA$1,1200.7%0.0%
TacomaWA$1,1170.4%7.9%
CharlotteNC$1,1130.0%2.0%
MidlandTX$1,1122.2%6.7%
DentonTX$1,1120.2%1.8%
DallasTX$1,107-0.1%2.9%
ElizabethNJ$1,1070.4%2.2%
GainesvilleFL$1,1050.1%3.4%
LancasterCA$1,1020.4%7.9%
LewisvilleTX$1,102-0.2%1.5%
NewarkNJ$1,1000.0%1.0%
New OrleansLA$1,0980.5%1.9%
Round RockTX$1,0970.3%-1.1%
RaleighNC$1,0960.7%2.6%
ChandlerAZ$1,0960.2%2.4%
ClearwaterFL$1,094-0.1%3.1%
Salt Lake CityUT$1,0870.3%6.6%
ModestoCA$1,0850.3%7.7%
San BernardinoCA$1,0840.2%3.5%
GilbertAZ$1,0830.3%3.3%
MilwaukeeWI$1,0830.3%1.4%
BrandonFL$1,0800.3%0.7%
IrvingTX$1,0750.0%2.5%
HendersonNV$1,0710.4%2.0%
West JordanUT$1,0570.9%4.4%
Colorado SpringsCO$1,0481.2%10.1%
West Valley CityUT$1,0450.6%5.4%
HoustonTX$1,044-0.1%-0.3%
RenoNV$1,0411.3%8.4%
DurhamNC$1,0400.9%1.9%
Baton RougeLA$1,035-1.0%3.0%
StocktonCA$1,0300.3%10.6%
WilmingtonNC$1,0240.1%4.2%
MurfreesboroTN$1,0220.3%2.4%
NorfolkVA$1,0210.7%1.3%
SavannahGA$1,0191.1%5.2%
Fort WorthTX$1,0120.2%4.2%
Overland ParkKS$1,007-0.3%1.8%
GreeleyCO$1,0060.3%0.8%
SyracuseNY$1,0000.2%0.9%
PeoriaAZ$9860.3%5.5%
Grand PrairieTX$9860.1%2.7%
North CharlestonSC$9850.1%7.2%
HamptonVA$9820.6%1.8%
ClevelandOH$9770.0%3.0%
ClovisCA$9760.3%4.4%
RichmondVA$9760.5%2.0%
VictorvilleCA$9720.5%7.4%
ColumbiaSC$971-0.3%2.3%
OdessaTX$9702.6%5.9%
JacksonvilleFL$9700.5%2.3%
BoiseID$9671.2%6.9%
San AntonioTX$967-0.2%0.9%
Corpus ChristiTX$9550.2%-1.5%
KnoxvilleTN$9511.0%5.1%
RochesterNY$9510.2%3.3%
DetroitMI$9390.0%6.0%
WacoTX$938-0.2%4.8%
FresnoCA$9380.3%4.6%
LakelandFL$9370.2%0.3%
SalemOR$9350.6%7.1%
BuffaloNY$9330.2%9.4%
ArlingtonTX$9330.6%6.3%
GarlandTX$9320.1%3.3%
Grand RapidsMI$9190.3%2.0%
LubbockTX$918-0.4%0.3%
MesquiteTX$917-0.2%4.6%
Kansas CityMO$9170.2%3.1%
ChattanoogaTN$9161.1%3.6%
BakersfieldCA$9130.4%2.4%
Las VegasNV$9110.3%3.8%
BirminghamAL$9100.2%1.6%
CincinnatiOH$9070.2%0.6%
PhoenixAZ$9020.3%3.7%
Newport NewsVA$8990.7%1.0%
North Las VegasNV$8980.2%1.0%
LincolnNE$8850.3%0.7%
OlatheKS$8810.1%4.8%
LouisvilleKY$8810.1%3.4%
WaterburyCT$8810.0%1.6%
SpokaneWA$8700.7%7.5%
LexingtonKY$8691.2%3.2%
MetairieLA$865-0.2%1.2%
NormanOK$864-0.5%-1.6%
MesaAZ$8620.2%2.4%
South BendIN$8590.1%4.1%
St. LouisMO$8590.1%-0.2%
OmahaNE$8540.6%1.1%
ColumbusOH$8530.5%2.6%
Des MoinesIA$8380.7%4.9%
ColumbusGA$8370.0%1.3%
Sterling HeightsMI$835-0.2%0.2%
PasadenaTX$827-0.1%5.9%
GlendaleAZ$8240.1%2.7%
GreensboroNC$8230.4%2.1%
AlbuquerqueNM$8130.0%2.4%
IndianapolisIN$8080.4%3.1%
AkronOH$801-0.4%2.0%
Broken ArrowOK$7930.5%-2.7%
MobileAL$7920.3%1.5%
ParadiseNV$7910.5%3.8%
Winston-SalemNC$7760.4%5.0%
TucsonAZ$7760.5%4.3%
Little RockAR$773-0.3%1.2%
McAllenTX$7721.0%-0.1%
Kansas CityKS$7650.3%2.3%
MaconGA$762-0.7%1.6%
AugustaGA$7600.0%1.2%
Las CrucesNM$7590.3%2.7%
LansingMI$7580.0%0.4%
WarrenMI$7540.1%1.2%
High PointNC$7530.3%1.2%
JacksonMS$7500.0%3.0%
El PasoTX$7410.1%-1.2%
MemphisTN$7330.4%1.2%
AmarilloTX$728-0.5%-0.7%
DaytonOH$7250.0%1.8%
Oklahoma CityOK$713-0.4%-2.9%
IndependenceMO$7090.0%2.8%
Fort WayneIN$7010.9%2.6%
KilleenTX$696-0.3%0.6%
BrownsvilleTX$692-1.3%1.3%
TulsaOK$665-0.3%-2.8%
ToledoOH$661-0.3%0.5%
WichitaKS$6330.5%1.4%
About RENTCafé 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 US, as reported by Yardi Matrix.

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About the author

Ama Otet

Ama Otet is an online content developer and creative writer for RENTCafé. She loves all things real estate and strives to live beautifully, one green step at a time. You can connect with Ama on Twitter or via email.

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