According to the latest Monthly Rental Report from Realtor.com, rental prices grew nationwide by nearly 20% from March 2020 to 2022 during the pandemic. Two-year rental trends indicate some redistribution of higher rents across the 50 largest markets during COVID, as renters migrated from expensive, big tech cities to relatively more affordable areas.
Sun Belt metros topped the list of fastest-growing rental markets from March 2020-2022, led by Miami, Riverside, California, and Tampa, Florida, while big tech hubs recorded many of the country's smallest two-year rent gains.
"With asking rents nearly 1.2 times higher than two years ago, our March data highlights rising rental affordability challenges faced by many Americans today," said Realtor.com Chief Economist Danielle Hale. "At the same time, March rental trends offer early signs of relief from the feverish pace of rent growth, which moderated year-over-year for the second month in a row. We expect cooling to continue over time, but the jury is still out on whether rent growth will hit single-digits by the end of 2022.”
The U.S. median rental price hit a new high of $1,807 in March, up 19.3% in just two years, highlighting a roller coaster of change since the pandemic began. Following a slowdown in 2020 at the onset of COVID, rents significantly made up lost ground in 2021 and have since maintained a feverish pace of annual rent growth. As a result, March marked the eighth consecutive month of double-digit annual rent gains even as the pace moderated slightly over February.
Top Markets by Biggest & Smallest Rent Gains Over March 2020
The biggest-growth markets and their average rent change:
- Miami, Florida (58%)
- Riverside, California (48.2%)
- Tampa, Florida (45.8%)
- Memphis, Tennessee (41.4%)
- Orlando, Florida (34.7%)
- Las Vegas, Nevada (34.4%)
- New Orleans, Louisiana (33.3%)
- Richmond, Virginia (30%)
- Jacksonville, Florida (29.2%)
- Phoenix, Arizona (29%)
The smallest-growth markets and their average rent change:
- Buffalo, New York (-2.3%)
- San Jose, California (0.1%)
- San Francisco, California (0.3%)
- Minneapolis, Minnesota (3.9%)
- Washington, D.C. (5.1%)
- Seattle, Washington (6.1%)
- Pittsburgh, Pennsylvania (6.3%)
- Chicago, Illinois (6.7%)
- Milwaukee, Wisconsin (8.4%)
- Detroit, Michigan (8.8%)
Although the underlying reasons have shifted over the course of the pandemic, data suggests that renting remains a popular option for Americans who desire flexibility. With the rise in remote work earlier on, renting offered an attractive option for those looking to explore living in relatively affordable markets further from big tech cities. Now that for-sale home prices and mortgage rates are climbing, many would-be buyers are turning to renting and driving up rental prices. In March, rents grew nearly four-times faster year-over-year than in March 2020.
With demand for more living space rising during COVID, rental prices for two-bedroom were up +21.9% and one-bedrooms up +17.9% units increased at the fastest rates from March 2020-2022. Studio rents, which experienced the biggest rental declines at the onset of COVID, posted relatively smaller two-year gains, up +12.6% in March. However, studio rents are quickly making up lost ground, posting the highest annual rental price gains among unit sizes for the third consecutive month in March.
Among the 50 largest U.S. metros, COVID rental trends indicate some redistribution of high rents from the biggest tech cities to relatively more affordable metros outside of major downtowns. In March, big tech cities accounted for none of the top 10 metros by highest two-year rent growth. Instead, this list was dominated by Sun Belt markets, led by Miami with an increase of 58.0% over March 2020.
Additionally, big tech cities represented five of the 10 slowest-growing rental markets from March 2020-2022. Despite these setbacks, many major tech hubs continue to command some of the nation's highest rents. Even San Jose, where rents remain largely unchanged from March 2020 levels, claimed the country's highest median rent at $3,075. Still, March rental data signals some final opportunities for renters to find savings in major metros like San Francisco, where rents for studios were down -13.0% and one-bedrooms down -3.3%.
"With booming employment and the growing back-to-office wave stoking demand, big rents are back in big tech cities,” said George Ratiu, Realtor.com Senior Economist & Manager of Economic Research. "Regardless of your stage of life, with rising prices taking a bigger bite out of paychecks, it's important to stay focused on financial health by keeping rental costs to a smaller percentage of your take-home pay.”
To read the full report, including charts and methodology, click here.