With median prices in some U.S. metro areas at nearly $3,000 a month, the financial pain of paying sky-high rent is a reality for many Americans. Meanwhile, in certain metros among the country's 50 largest markets, renters can still find relative affordability, according to the Realtor.com Monthly Rental Report [1].
Oklahoma City is the only metro among the 50 largest in the nation where renters can find a median-priced apartment for less than $1,000 a month. The report showed that Oklahoma City offered the lowest monthly rental price in January, at $982.
Highlights
- January 2023 marks the twelfth month of slowing rent growth, and sixth month in a row with a single-digit rate of increase for 0-2 bedroom properties (2.9% Y/Y).
- The median asking rent in the 50 largest metros declined to $1,726, down by $7 from last month and $80 from peak.
- Rent growth keeps cooling for all unit sizes. Rent by size: Studio: $1,417, up 3.9% ($54) year-over-year; 1-bed: $1,609, up 2.8% ($44) year-over-year; 2-bed: $1,934, up 2.5% ($47) year-over-year.
- Faster rent growth was seen in some of the least expensive rental markets such as Indianapolis, IN (10.5%), Birmingham, AL (8.8%), Columbus, OH (8.3%), raising affordability concerns.
There are 10 markets where median monthly rents are lower than $1,300, according to the report. Half are in the Midwest, four are in the South, and one is in the Northeast. None are in the West.
The least expensive markets are:
- Oklahoma City - $982
- Louisville, Ky. - $1,167
- Birmingham, Ala. - $1,178
- Rochester, N.Y. - $1,235
- Columbus, Ohio - $1,242
- Indianapolis- $1,266
- Memphis, Tenn. - $1,274
- St. Louis, Mo. - $1,279
- Cleveland - $1,290
- Kansas City, Mo./Kan. - $1,298
Renters looking to take advantage of the best possible prices should move quickly. While the rents in these metros are the lowest among the 50 largest, for many of them, prices are increasing at a faster rate than in the rest of the country.
"With high rents across the country, places that offer relative affordability tend to be in high demand, which means more competition and that these lower prices might not last," said Realtor.com Chief Economist Danielle Hale. "Many of these metros have fewer available rental homes than previous months, and fewer apartments to choose from means prices are likely to go up. Cities including Indianapolis, Birmingham, Columbus, Kansas City, Cleveland, and Rochester are among the more affordable metros that experienced the fastest year-over-year price increases in January 2023, leaving few metros that are maintaining their current level of affordability."
Many of these areas also have less rental availability than in past years, suggesting that affordable metros are increasing in popularity. For example, in the fourth quarter of 2022, the average rental vacancy rate across these least expensive markets was 7.6% — a significant drop from the 9.7% vacancy rate in the fourth quarter 2017. However, seven of the most-affordable areas still had greater vacancy rates than the country's average, which was last tracked at 5.8% nationwide.
Nationwide, rent growth for studio to two-bedroom properties continued to slow. Median rent was down 2.9% year-over-year, the lowest growth rate in 22 months. In comparison, January 2022 rent was up 16.2% from the year prior.
Last month was the twelfth month of cooling rent growth and the sixth month in a row with a single-digit rate increase. The median asking rent in the 50 largest metros declined to $1,726, down by $7 from last month and $80 less than the August 2022 peak of $1,806. Yet, rental prices are still up 20.6% ($295 higher) from pre-pandemic January 2020.
To read the full report, including more data, charts and methodology, click here [1].