Rent Growth Now Outpaces Home Price Growth
- August marks the first month on record where rent growth has reached double digits (11.5% Y/Y). Rent growth now outpaces home price growth (8.6%).
- August 2021 data: In the 50 largest metros, the median rent was $1,633, up 11.5% year-over-year. This translates to an additional $169 per month for renters. Compared to August 2019, the median rent has increased by $197 (13.7%).
- Rents by size: Studio: $1,338, up 8.3% ($103) year-over-year; 1-bed: $1,524, up 11.6% ($158); 2-bed: $1,828, up 12.3% ($200). Rents for all unit sizes are at series highs.
- Rents are increasing the most in Tampa, FL; Riverside, CA; Miami, FL; and Phoenix, AZ metro areas — all saw rents grow more than 25% year-over-year in August.
Rents across the country reached new highs in August, growing by double digits for the first time on record. After months of stalled rent growth during the peak of the pandemic, gradual recovery gave way to price surges in 2021. Now, the national rent has reached $1,633, up 11.5% ($169) year over year, and is growing over 3 times as fast as the 3.2% growth rate seen just before the pandemic hit in March 2020.
Monthly rent growth is still slightly above average at 1.6%, but not as intense as in May and June, when rents increased by 3.0% and 3.2%, respectively, from each month to the next.
Rent YoY Trend Since the Start of the Pandemic
In 35 of the 50 largest metro areas, rents reached their highest levels on record and are growing faster than ever. Of the 50 largest metros, all but four saw rents hit new all-time highs this summer (June-August). The holdouts are San Francisco (August 2019); San Jose (March 2020); Boston (July 2020); and New York City (August 2020).
|Metro||Previous Peak Rent||Date of Peak Rent||August 2021 Rent||Distance from Peak||August YY Growth|
|San Francisco-Oakland-Hayward, CA||$3,008||Aug-19||$2,895||-3.8%||1.4%|
|San Jose-Sunnyvale-Santa Clara, CA||$3,127||Mar-20||$2,995||-4.2%||7.0%|
|New York-Newark-Jersey City, NY-NJ-PA||$2,625||Aug-20||$2,455||-6.5%||-6.5%|
After months of price declines in the bay area rental market, San Francisco and San Jose are finally seeing rents grow. Rents in San Jose reached $2,995 in August, up 7.0% year over year. Earlier this year, rents in the San Jose area were declining by 14.1%. San Jose’s rents peaked in March 2020 when they reached $3,127, which will eventually be surpassed if the current trends continue.
Following the upward trend, San Francisco rents reached $2,895 in August, up 1.4% year over year. Earlier this year, rents in San Francisco were declining by 12.6% compared to last year. San Francisco rents peaked at $3,008 in August 2019, just $113 (3.8%) greater than the current monthly rent.
Rent Growth Making Up for Lost Time
It’s no secret that home prices have skyrocketed since the pandemic. The demand for larger homes, coupled with inventory shortages, have put upward pressure on home prices over the past year. Home prices have seen double digit growth since last August, and peaking in April when home prices were up 17.1%. The market has since cooled somewhat, and as of August, home prices are up 8.6% over last year.
However, as the for sale market is settling, the rental market continues booming, with rent growth now hitting double digits and outpacing home price growth.
The pandemic caused rent growth to slow to a crawl at the end of last year and into early 2021. Now, into the second half of 2021, improved vaccination rates and the reopening of cities has turbo-charged the rental market, with price growth seemingly determined to make up for lost time. Cumulatively, rents are up 13.7% since Sept 2019 while the median home price is up 19.6% in that period, signaling some more room for rent growth to catch up.
National Rents by Unit Size
|Unit Size||Median Rent||Rent YoY||Rent Change – 2 years|
In August, two-bedroom units saw the largest increase in rents, with the median rent reaching $1,828 nationally, $200 (12.3%) higher than the same time last year. Thanks to consistent preferences for larger homes over the last couple of years, the median monthly rent for 2-bed units has increased by $262 (16.7%) since August 2019 and is now at the highest level in our data history.
One-bedroom units also saw double digit rent growth in August. The median rent for 1-bedroom units reached $1,524 nationally, up $158 (11.6%) compared to last year. The median monthly rent for 1-bed units has increased by 14.3% ($190) since August 2019, reaching the highest level in our data history.
Studio units are continuing their recovery, with rents reaching $1,338 nationwide in August, up $103 (8.3%) year-over-year. The median monthly rent for studio units has increased by $100 (8.1%) since August 2019 and is at the highest level in our data history. Nationally, studio rents were dipping by as much as 5% earlier this year, but have steadily recovered as larger cities have seen residents returning.
National Rental Trend by Unit Size
Tampa, FL was the fastest growing metro area, with the median rent reaching $1,760 in August, up 30.6% year-over-year. The other metros topping the list of fastest growing rents were Riverside, CA; Miami, FL; and Phoenix, AZ, which all saw rents growing by over 25% compared to last year.
Top 10 Markets for Rent Increases – August 2021
|Rank||Metro||Overall Rent||Overall Rent YY|
|1||Tampa-St. Petersburg-Clearwater, FL||1,760||30.6%|
|2||Riverside-San Bernardino-Ontario, CA||2,234||28.6%|
|3||Miami-Fort Lauderdale-West Palm Beach, FL||2,432||27.0%|
|5||Las Vegas-Henderson-Paradise, NV||1,515||23.4%|
|6||San Diego-Carlsbad, CA||2,695||23.4%|
|8||Austin-Round Rock, TX||1,618||21.7%|
|10||Atlanta-Sandy Springs-Roswell, GA||1,697||21.2%|
Rental Data – 50 Largest Metropolitan Areas – August 2021
|Metro||Overall Rent||Overall Rent YY||1br Rent||1br Rent YY||2br Rent||2br Rent YY|
|Atlanta-Sandy Springs-Roswell, GA||1,697||21.2%||1,600||22.2%||1,857||21.8%|
|Austin-Round Rock, TX||1,618||21.7%||1,486||22.5%||1,809||22.1%|
|Buffalo-Cheektowaga-Niagara Falls, NY||1,195||9.6%||1,070||7.3%||1,355||11.5%|
|Dallas-Fort Worth-Arlington, TX||1,450||16.0%||1,330||17.5%||1,725||19.8%|
|Hartford-West Hartford-East Hartford, CT||1,525||5.2%||1,425||3.3%||1,700||6.6%|
|Houston-The Woodlands-Sugar Land, TX||1,300||7.9%||1,195||9.3%||1,474||8.8%|
|Kansas City, MO-KS||1,149||7.1%||1,045||5.9%||1,350||8.0%|
|Las Vegas-Henderson-Paradise, NV||1,515||23.4%||1,385||24.8%||1,655||24.6%|
|Los Angeles-Long Beach-Anaheim, CA||2,800||10.2%||2,550||10.9%||3,374||12.5%|
|Louisville/Jefferson County, KY-IN||1,030||8.4%||981||6.1%||1,121||13.2%|
|Miami-Fort Lauderdale-West Palm Beach, FL||2,432||27.0%||2,150||26.5%||2,802||24.5%|
|Milwaukee-Waukesha-West Allis, WI||1,415||5.6%||1,305||2.8%||1,650||9.6%|
|Minneapolis-St. Paul-Bloomington, MN-WI||1,500||3.4%||1,435||2.9%||1,833||7.8%|
|New Orleans-Metairie, LA||1,329||-3.3%||1,279||-1.6%||1,500||-0.3%|
|New York-Newark-Jersey City, NY-NJ-PA||2,455||-6.5%||2,275||-9.0%||2,750||-5.2%|
|Oklahoma City, OK||850||5.1%||759||5.4%||899||2.7%|
|Riverside-San Bernardino-Ontario, CA||2,234||28.6%||1,900||24.5%||2,545||34.0%|
|San Antonio-New Braunfels, TX||1,182||11.3%||1,098||13.8%||1,354||13.9%|
|San Diego-Carlsbad, CA||2,695||23.4%||2,495||27.0%||2,998||20.9%|
|San Francisco-Oakland-Hayward, CA||2,895||1.4%||2,690||-0.4%||3,352||-1.4%|
|San Jose-Sunnyvale-Santa Clara, CA||2,995||7.0%||2,786||7.6%||3,400||6.3%|
|St. Louis, MO-IL||1,155||6.5%||1,129||10.1%||1,240||7.8%|
|Tampa-St. Petersburg-Clearwater, FL||1,760||30.6%||1,629||35.9%||1,980||35.2%|
|Virginia Beach-Norfolk-Newport News, VA-NC||1,350||13.4%||1,315||13.6%||1,445||15.6%|
Rental data as of August 2021 for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. National rents were calculated by averaging the medians of the 50 largest metropolitan areas.