National Average Rent Jumps To An All-Time High -
Friday , 27 November 2020

National Average Rent Jumps To An All-Time High

…The biggest concern from an inflation “basket” standpoint has little to do with Trump’s trade war, and everything to do with shelter costs, and especially rent, the single biggest contributor to the Fed’s inflation calculation…According to the latest report from RentCafe and Yardi Matrix (which compiles data from actual rents charged in the 252 largest US cities), fewer than expected apartment deliveries this year increased competition among existing units, pushing up the national average rent by another 3.1% – the highest monthly increase in 18 months – to $1,412 in August, an all time high. 

The original article has been edited here by for length (…) and clarity ([ ])

The rental market is so hot right now – perhaps a…[continuing] sign that most Americans remain priced out of purchasing a home – that rents:

  • increased in 89% of the nation’s biggest 252 cities in August,
  • stayed flat in 10% of cities,
  • and dropped in only 1% of cities compared to August 2017. 
  • Queens (NYC), Las Vegas, and Phoenix rents increased the most in one year, 
  • while Baltimore, San Antonio, and Washington, DC rents have changed the least among the nation’s largest cities.

Here are the main highlights…

In terms of absolute prices...

According to RentCafe, much of the change in rent prices we see this year is driven by how much demand there is in a specific area and what that area does to deal with it. However, the underlying factors are more complex.

  • The housing market continues to change as a result of the 2007 subprime crisis, according to Doug Ressler, Director of Business Intelligence at Yardi Matrix.
  • Furthermore, markets are undergoing a significant change driven by dramatically different demographic trends. Trends vary by market and will be impacted by population aging, population growth, immigration and home ownership trends, says Ressler.
  • Naturally, they will also be impacted by the state of the economy, the Fed’s monetary policy and the level of the capital markets.

However, should the current rental surge continue, the Fed will have no choice but to hike rates far higher than the general market consensus expects, especially following Powell’s “dovish” Jackson Hole speech.