April Rents Rev Up for the Rental Season with Highest Annual Increase in 16 Months

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Key takeaways:

• The national average rent was $1,377 in April 2018, having increased by 3.2 percent year over year, and by 0.3 percent ($4) month over month, according to data from Yardi Matrix.
• Rents increased in 84 percent of the nation’s biggest 250 cities in April, were unchanged in 14 percent of cities, and dropped in 2 percent of cities compared to April 2017. 
• The top 20 fastest growing rents in the country are in small cities, including Reno, NV, Boise, ID, and Orlando, FL. 
• Among the largest U.S. cities, Las Vegas, Denver, and Detroit had the fastest rising prices in April, while rents in New York, Baltimore, and DC stopped rising. 

Rents in all unit sizes pick up steam in April

Increasing demand across the board has caused one, two, and three-bedroom apartment rents to go up by 3.3% compared to prices in April 2017, while studio apartment rents were up by 2.9% year over year. In April 2018, the average rent for a studio apartment in the U.S. was $1,216, the average rent for a one-bedroom apartment was $1,241. The cost of a two-bedroom apartment was $1,454, and a three-bedroom unit was renting for $1,682 on average.

National rents rev up with a 3.2% annual increase; 5 cities post double-digit growth

The national average rent in April saw the highest year-over-year increase since the end of 2016, a 3.2% uptick compared to the same time last year, reaching $1,377/month. Month-over-month, national rents grew by 0.3%, or $4, compared to March, revving up as we approach the start line of 2018’s peak rental season.

The highest annual rent increases in April were in Odessa, TX (up 35.6% y-o-y), Midland, TX (32.6%), followed by Yonkers, NY (11.5%), Reno, NV (10.8%), and newcomer to the top 5 Hollywood, FL (10.6%). The average monthly rent in Odessa is now $1,273, in Midland $1,467, in Yonkers, NY $1,922, in Reno, NV $1,164 and in Hollywood, FL $1,425. Renters in Lancaster, CA, Greeley, CO, and Boise, ID also saw high rent increases above 8%. In total, rents rose in 84% of the nation’s 250 largest cities in April.

Rent prices in Norman, OK, Lubbock, TX, New Orleans, LA, Brownsville, TX, Hillsboro, OR, and Alexandria, VA are down compared to April last year. Many big cities are seeing rents decline or stagnate as well, including New York, Baltimore, Washington, DC, Portland, OR and Austin, TX. The average rent in Austin, TX exceeded $1,300/month in April, in Portland the average apartment rent was $1,454/month, while apartments in Washington, DC cost $2,070/month on average.

No significant fluctuation in prices was noticed in Chicago, Philadelphia, San Francisco, Cleveland, Newark and St. Louis, where apartment rents grew slower than 2% over the year, although that may change in the upcoming months as activity starts to pick up.

Large cities: Las Vegas, Denver, Detroit apartments see highest price jumps

With a 6% increase over the year, Las Vegas rents rose the most among the largest U.S. cities, reaching $979/month in April, as the local housing market is rebounding. Denver remains one of the hottest cities for renters in the U.S., with apartments renting for $1,559/month, 5.8% more expensive than they were one year prior. Rental housing in Detroit is making a comeback after years in the slump. Apartments in Detroit saw the third highest yearly increase in prices among big cities, 5.4%, reaching just $1,015/month, still well below the national average.

Also poised for an active rental season are Phoenix and San Diego, with 5% and 4.6% year-over-year increases in April. Jacksonville, Charlotte, Los Angeles and Houston apartment rents rose by more than 4%, while Columbus, Fort Worth, Dallas and Seattle rents were more moderate, between 3-4%.

Rents in Brooklyn and Manhattan apartments continue sliding, by -1% and -0.2%, with the average price in Manhattan $4,063/month and in Brooklyn $2,688. Meanwhile, Baltimore apartments stagnate around $1,200/month, as the market is cooling down. Monthly rents in DC, Portland, Austin, San Francisco, El Paso and Oklahoma City have been steady for the month, growing by less than 1.5%.

Mid-size cities: Sacramento rents cool down but still lead

If the price of rent in Sacramento was growing by 7.2% as of last month, it cooled down to 6% in April, still the highest year over year increase among mid-sized cities, stopping just shy of $1,300/month. Stockton, CA’s more affordable rental housing is also heated, with a year over year growth of 5.8%, and an average rent $1,100 per month, which is low by California standards.

Tampa, FL renters are also feeling the heat before the start of the summer, with rent increases of 5.7% over the year and a monthly average rent that’s starting to rival Southeast Florida prices, at $1,254. Central California’s Fresno saw a 5.1% jump in rents in April, breaking the $1,000/month mark. Rents for apartments in Kansas City, MO and Arlington, TX increased by 5%, while Minneapolis, Oakland, Atlanta and Miami saw more moderate increases.

At the other end of the spectrum are New Orleans, Tulsa, Wichita, Virginia Beach and Raleigh, where rents are growing the slowest in the mid-size city category. The average rent in New Orleans was $1,088 in April, in Virginia Beach, $1,183, and in Raleigh $1,112.

Small cities see the top 20 most sizeable rent increases in April

At the top of the list reigns the Midland-Odessa area, with prices up by 35.6% and 32.6% year over year. Odessa apartments now cost $1,273 on average, while Midland rents cost $1,467/month. Yonkers, NY rents have been skyrocketing over the last few months, growing again by 11.5% over the year, approaching the $2,000 mark. Renters in Reno continue to struggle with a 10.8% annual increase, now paying $1,164/month on average. Apartments in Hollywood, FL are seeing an uptick in demand, pushing rents in the small town located south of Fort Lauderdale up by 10.6%, reaching $1,425/month in April, from $1,288 one year ago.

At the bottom of the list sit Norman, OK (-2.5%), Lubbock, TX (-2.5%, less than last month’s -4.3% decrease), Brownsville, TX (-1.7%), Hillsboro, OR (-1.6%), and Alexandria, VA (-1.1%). Rents were sluggish in Baton Rouge, LA, Bellevue, WA, Mobile, AL, Hampton, VA, and College Station, TX. Moderate increases of about 3% were seen around the country in Durham, NC, Spokane, WA, Burbank, CA, Augusta, GA, and Wilmington, DE, to name a few.

Manhattan, NYC has the most expensive rents in the country, with an average rent of $4,063 as of April. San Francisco is the second most expensive for renters, with apartments going for $3,442/month on average. Renting in Boston, MA is the third most expensive in the U.S, at $3,255 per month. Also in the top 10 priciest cities for renting are San Mateo, CA, Cambridge, MA, Jersey City, NJ, Sunnyvale, CA, Santa Clara, CA, Brooklyn, NY and San Jose, CA.

Apartments in Wichita are the cheapest of the 250 cities surveyed in April, with an average rent of $633/month, increasing just 1% year over year. The second most affordable is Tulsa, OK, with an average rent of $668, only 0.5% more than the previous year, followed by Brownsville, TX where apartments cost $685 on average, after a decline of -1.7% year over year. Also among the 10 most affordable cities for renters are Toledo, OH, Killeen, TX, Independence, MO, Amarillo, TX, Dayton, OH, Oklahoma City, OK and Fort Wayne, IN, all with prices under $750/month.

Source: rentcafe.com