Fueled by a higher demand for rental properties plus strong job growth in key markets, U.S. rental prices continue an upward climb. The average apartment rent rose another $5 from the previous month to hit a new record high of $1,155 in July, according to the latest Yardi Matrix Monthly apartment market survey.
The average rental price for the month is also up an impressive 6.5% year-over-year, marking the largest growth rate in the current cycle. Although seasonal rent growth could slow in the coming months, some of the top markets for rent growth are not showing any sign of easing up.
Rent Growth Nationwide Tied to New Jobs
Apartment rents are expected to continue the upward climb in areas with strong job growth, especially those highly tied to the technology field. These markets include Portland, Denver, and San Francisco, all of which report double-digit rental growth year-over-year.
In fact, rent growth in the current cycle appears to be correlated more with higher demand than supply factors, the Matrix report notes. Higher-end Lifestyle properties are performing well right now, especially in robust markets like San Diego with its high concentration of medical and tech industries. This suggests that metros creating more high-paying jobs will also continue seeing increased demand for upscale rentals and increased rental prices.
While the Pacific Northwest ranks highest in rent growth, rapid population growth is also helping to propel rental prices in the South. As a majority of U.S. markets remain strong, so do even some of the lower performing markets. Surprisingly, of those markets, only five metros reported rental growth of less than 4% year-over-year.
What Will $1,155 per Month Afford?
So, what can renters afford to buy in some of the nation’s top metros?
Denver
Just steps away from the business district, plus dining, nightlife and parks, Denver renters can afford a handsome one-bath/studio apartment. Located conveniently in the Uptown neighborhood, Ascent Uptown Apartments offers the ease of living right in the middle of everything. For right around the national average, monthly rent also includes a reserved parking space.
Austin
The same amount of money buys a lot of space and a lot of amenities in Austin. Two-bedroom/two-bath rentals are available in Wind River Crossing starting at $1,085/mo. Close to shopping and the Arboretum, rentals also include a community swimming pool, tennis courts, a 24-hour fitness center, plus over-sized private balconies and patios.
Washington, DC
Even in desirable areas of metros with traditionally high rent prices there are economical options, such as the Dahlgreen Court Apartments in Washington, DC. Although paying less than the national average, renters within this complex can enjoy living in a one-bedroom/one-bath home for $1,044/month. The gated apartment community also features a fitness center and is close to the Rhode Island Metro Station.
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