Rental costs are continuing to rise across the United States, with some large cities posting decreases in median one-bedroom rent.
According to a report released on Tuesday by rental platform Zumper, national one-bedroom rent reached $1,503 in September — a figure that reached its ninth high for the ninth consecutive month. Rent is now $1,845 for two-bedroom apartments, indicating another all-time high. However, some metropolitan areas — such as San Jose, California; Miami, Florida; and Nashville, Tennessee — saw moderate month-over-month decreases in average one-bedroom rent.
“The rental market has been very supply constrained for the past five quarters, but there has been a significant shift back towards equilibrium in the past quarter,” Zumper CEO Anthemos Georgiades explained in a press release provided to The Daily Wire. “Occupancy rates and the pace of rent increases are now falling in many major metros, as renter demand softens and fear of recession kicks in, with many renters deciding to stay put or trade down on the most expensive options.”
Meanwhile, cities such as San Francisco, California; Boston, Massachusetts; and Anaheim, California, continued to see rising month-over-month prices for one-bedroom apartments.
The most expensive city in the nation for renters is New York City, where residents pay an average of $3,950 for a one-bedroom unit — a rate that has increased nearly 34% over the past year. The Big Apple is followed by San Francisco and Boston, where rent is $3,100 and $2,890, respectively.
According to Zumper, many metropolitan areas are contending with low availability of housing units. In Seattle, Washington, a competitive housing market is driving would-be homebuyers to search for apartments, prompting the city council to unanimously greenlight a special election that will determine whether officials should create more affordable housing.
Last week, the Federal Reserve raised the target federal funds rate 0.75% — a move which followed two identical hikes in June and July — in an attempt to relieve elevated inflationary pressures. The actions have contributed to mortgage rates surpassing 6%, according to data from government-backed mortgage company Freddie Mac.
“Impacted by higher rates, house prices are softening, and home sales have decreased,” Freddie Mac Chief Economist Sam Khater said in a press release. “However, the number of homes for sale remains well below normal levels.”
In the second quarter of 2022, the median sale price of a home in the United States was $440,300, according to data from the Department of Housing and Urban Development, marking a 36% rise from $322,600 in the second quarter of 2020. Home prices are expected to increase another 4% in 2023 — a relative slowdown from 17.8% in 2021 and 12.8% in 2022.
The high prices have produced a slowdown in home purchases, with the National Association of Home Builders’ Housing Market Index falling last month to its lowest level in the past two years.
Younger American renters have been particularly impacted by the tight real estate market. An analysis from Filterbuy showed that at least half of Millennials, defined by the company as those between 24 and 39 years old, cannot afford a one-bedroom apartment in many major American cities. For the area surrounding Los Angeles, California, median wages are $36,649, while the annual wage required to affordably rent a one-bedroom apartment is $72,560.