Rents explode across the US, forcing many to dig deep or move
- Median rent rose 19.3 per cent in 12 months in the 50 largest US metro areas, according to Realtor.com
- Boston has nearly overtaken San Francisco as the second-most expensive US rental market
Rents have exploded across the United States, causing many to dig deep into their savings, downsize to subpar units or fall behind on payments and risk eviction now that a federal moratorium has ended.
In the 50 largest US metro areas, median rent rose an astounding 19.3 per cent from December 2020 to December 2021, according to a Realtor.com analysis of properties with two or fewer bedrooms. And nowhere was the jump bigger than in the Miami metro area, where the median rent exploded to US$2,850, 49.8 per cent higher than the previous year.
Other cities across Florida – Tampa, Orlando and Jacksonville – and the Sun Belt destinations of San Diego, Las Vegas, Austin, Texas, and Memphis, Tennessee, all saw spikes of more than 25 per cent during that time period.
Rising rents are an increasing driver of high inflation that has become one of the nation’s top economic problems. Labor Department data, which covers existing rents as well as new listings, shows much smaller increases, but these are also picking up. Rental costs rose 0.5 per cent in January from December, the Labor Department said last week. That may seem small, but it was the biggest increase in 20 years, and will likely accelerate.
Economists worry about the impact of rent increases on inflation because the big jumps in new leases feed into the US consumer price index, which is used to measure inflation.
Inflation jumped 7.5 per cent in January from a year earlier, the biggest increase in four decades. While many economists expect that to decrease as pandemic-disrupted supply chains unravel, rising rents could keep inflation high through the end of the year since housing costs make up one-third of the consumer price index.