The U.S. rental market is on fire, with low vacancies, solid absorption, and increased construction activity recorded in most metros around the country. Some may even call it a landlord’s market, as tight availability and rent growth have become recurring themes of the leasing sector.
Average rents rose to a record high of $1,136 in May, up 0.8% month-over-month and 2.3% over the past three months, according to the latest Yardi Matrix Monthly report. The average year-over-year rent growth now stands at 6.1%, pointing to a stronger year than previously anticipated. Even at an annual increase of 4.9%, which is the projected rent growth for 2015, recent years still give us a growth rate faster than anything the rental market has seen for a while.
Rental Market Red Hot in Western and Southern Markets
Overall, the biggest rental increases among the 61 largest metro areas that Matrix surveyed are generally in the western and southern parts of the country. Here are some key takeaways, as noted by the Matrix report:
- Rents grew by double-digit percentages in 5 metros: Jacksonville and Portland (12.7%), San Francisco (11.9%), Sacramento (11.8%), and Denver (11.5%)
- Other major US markets with significant rent increases are: Seattle, Orlando, the Inland Empire, San Diego, and Atlanta
- Rent growth weakened in both Baltimore and Washington, D.C. where annual increases hover around 2%
- From an affordability standpoint, things are looking great for Nashville renters, the only metro in which rents have declined over the last three months
- The plunge in oil prices and drilling doesn’t seem to have affected Houston’s rental market that much after all – the city has produced growth in line with the national averages, up 6.0% Y-o-Y
- Much of the rent growth recorded in the East Coast hubs, including Boston and Philadelphia, is closely tied to the strong performance of upper-end Lifestyle properties, a sign of growth in high-income jobs and neighborhood gentrification.
What can renters get for $1,136/mo. in the nation’s top 3 markets for rent growth
Fuelled by job and population growth, the multifamily market is thriving, no doubt about that. Renters are leasing up units almost as fast as they come on the market, and finding a nice place to call home in this competitive environment comes with its challenges. For the budget-conscious renter this may mean more prospecting and careful planning before actually taking the plunge into renting.
Let’s take a look at what renters may get around the country for about $1,136/mo.
With asking rents averaging $1,084 in Jacksonville, there’s plenty of choice in the city for budget-minded renters, including this amazing property at 11 East Forsyth Street – a redevelopment of the historic Roosevelt hotel. Situated in a premier downtown location, The Carling (pictured below) features a wealth of amenities, including a 1,000 square-foot fitness center, a recreation area, and media room. Rents start at $905.
Portland offers a large variety of housing options, for every taste and budget. For roughly the national average rent, renters may enjoy living in some of the city’s best neighborhoods. The Westfal Apartments community is located in the University District, across the street from PSU, with the convenience of immediate public transportation, a seasonal farmers market, shops, eateries, and cultural activities. Rents range from $1,150 to $1,200.
Believe it or not, there are reasonably priced rentals in San Francisco; you just need to do your research properly and adjust your expectations to fit the market’s realities. Rents for studio apartment homes in the city start from $1,195, RENTCafé data shows. For a little more than the national average you may rent a home that’s close to it all: entertainment, shopping, vibrant nightlife. The Hayes Valley Apartments in Hayes Valley offer pet-friendly two – , three-, and four-bedroom apartment homes and townhomes with washers and dryers, modern eat-in kitchens, and private balconies or patios for the best in secluded city living.