Realtor.com® September Rental Report: Big Tech City Rents Are Back

Rhea-AI Summary

Rental prices in major U.S. tech cities surged, with September 2021 rents exceeding March 2020 levels by an average of 6.3%, according to Realtor.com®. Nationally, rents increased by 13.6% year-over-year for the second consecutive month. Cities like Austin saw remarkable increases, with rents up 22.3%. The national median rent reached a record $1,654. Despite the upward trend, experts suggest a potential cooling in rent growth during winter, as competition grows and seasonality returns.

Positive

• September 2021 rents in major tech cities rose an average of 6.3% above March 2020 levels.
• National rents grew by 13.6% year-over-year, marking robust market recovery.
• Austin led with a 22.3% increase in rental prices year-over-year.
• The U.S. national median rent hit a record high of $1,654 in September 2021.

Negative

• Some cities, such as New York, experienced a 3.8% decline in rents compared to September 2020.
• Seattle's rental growth was only 16.7%, reflecting a slower recovery from COVID impacts.

SANTA CLARA, Calif., Oct. 28, 2021 /PRNewswire/ -- From Broadway lights to bustling offices, big cities are back – and so are surging downtown rental prices. Following sharp declines during the pandemic, September data shows rents in the 10 biggest U.S. tech cities like Austin and New York surpassed March 2020 levels by an average of 6.3%, according to the Realtor.com^® Monthly Rental Report released today. Nationally, rents grew at a double-digit annual pace (+13.6%) for the second month in a row.

"With rents continuing to surge to new highs nationwide, including in big tech hubs, September data confirms the U.S. rental market has moved past the recovery phase and is fully back in business. Rental demand remains unseasonably high, driven by still-limited housing supply, rising mortgage rates pushing buyers towards renting, and more people returning to big cities," said George Ratiu, Manager of Economic Research for Realtor.com^®. "At the same time, it's important to put recent rental activity in the context of housing trends throughout the pandemic. Rents didn't rebound from COVID declines as quickly as for-sale home prices, but rental activity has now reached a level not unlike the homebuying frenzy seen earlier this year, before fall seasonality kicked in. The good news is that if rents continue to parallel home listing prices, rental price growth could potentially begin cooling this winter."

Rents surge in major urban tech hubs following steep pandemic declines

While big city rents dropped or stalled during the pandemic as people fled to less expensive and crowded areas, large urban rental markets began to rebound in April 2021 with the rollout of vaccines. However, rent growth in these major metros has found its stride over the past two months, with September data showing big city rents have not only recovered but are making up for lost time. In most counties at the heart of the nation's 10 biggest tech cities, the September rental growth rate was higher than in March 2020, before the onset of COVID.

• The average rent across the 10 biggest U.S. tech cities grew by 9.9% year-over-year in September and was 6.3% higher than in March 2020. For comparison, average big tech metro rents declined by as much as 7.2% at the height of the pandemic.
• Some of the cities with September's biggest annual rent gains, such as Austin (+22.3%) and Denver (+15.5%), did not necessarily experience the steepest COVID declines among big tech hubs during the pandemic.
• However, rents are surging even in major metros that experienced some of the nation's biggest COVID declines. For instance, Seattle rents were 8.1% higher in September compared to March 2020, bouncing back from declines of 12.3% at the city's lowest point during the pandemic. 

"The days of rental deals in metros like San Francisco and Manhattan may be over, but there is a silver lining for renters with more flexible timelines. Big city rental competition and high prices is a sign of normalcy, which could precede more seasonal norms like winter cooling in rent growth in parts of the U.S.," Raitu added. "For renters on tighter schedules, compromises will be key to staying on budget and not getting swept up in bidding wars. If location and size are your must-haves, consider deprioritizing extra amenities or upgrades. You can use tools like the Realtor.com^® Rentals app to set up searches and alerts for rentals that match your top criteria."

Rental prices quicken their double digit pace

For the second consecutive month, national rents grew at a double-digit pace over last year and at a higher rate than in August. September's rent growth was faster than in a typical year, but month-over-month has been getting smaller since the summer. This suggests a return to seasonality may be on the horizon for this coming December or January.

• In September, the U.S. median rental price reached a new high of $1,654, up 13.6% year-over-year.
• Annual rent growth in September was four-times faster than in March 2020 (+3.2%), before the onset of COVID.
• National rents are now 15.5% ($222 per month) higher than in September 2019.
• September's national rent increase over 2020 was higher than in August (+11.5%), but month-over-month increases have been moderating from the feverish pace seen over the summer, up 3.2% from May to June.
• In a typical pre-COVID year, rents have historically fluctuated by less than 1% on a monthly basis.
• Nationally, all unit sizes tracked by Realtor.com^® saw double-digit rent growth and reached new rental price highs in September. COVID demand for more space continues to drive the highest price growth among larger units, led by two-bedrooms at a yearly increase of 14.4% to $1,855.
• One-bedroom units also saw a sizable rental price increase (+13.7% year-over-year) to $1,542 in September.
• For the first time in 2021, studio rent growth hit double-digits, up 11.3% over last year to a median of $1,351 per month. 
• Rents grew by double-digits in more than half (31) of the 50 largest U.S. markets in September, led by secondary metros like Tampa (+33.3%).
• Seven metros posted yearly rent gains of at least 25%; in addition to Tampa, these were: Miami (+31.6%), Riverside, Calif. (+26.5%), Phoenix (+26.4%), Las Vegas (+25.9%), Austin (+25.3%) and San Diego (+25.1%).

Realtor.com® September 2021 Rental Data - 10 Biggest U.S. Tech Hubs
Metro	Pre- COVID Rent (Mar 2020)	COVID Low Month	COVID Low Rent	COVID Low vs. March 2020	Sept. 2021 Rent	Sept. 2021 Rent YoY	Sept 2021 vs. COVID Low	Sept. 2021 vs. March 2020
Austin, Texas	$1,367	Oct-20	$1,300	-4.9%	$1,647	25.3%	26.7%	20.5%
Boston, Mass.	$1,680	Dec-20	$1,600	-4.8%	$1,895	3.4%	18.4%	12.8%
Chicago, Ill.	$2,300	Apr-21	$2,350	2.2%	$2,500	2.7%	6.4%	8.7%
Denver, Colo.	$2,635	Feb-21	$2,488	-5.6%	$2,850	15.5%	14.5%	8.2%
Los Angeles, Calif.	$1,938	Dec-20	$1,700	-12.3%	$2,095	13.8%	23.2%	8.1%
New York, N.Y.	$1,976	Dec-20	$1,836	-7.1%	$2,075	-3.8%	13.0%	5.0%
San Francisco, Calif.	$1,650	Dec-20	$1,593	-3.5%	$1,695	5.5%	6.4%	2.7%
San Jose, Calif.	$2,480	Jan-21	$2,242	-9.6%	$2,517	10.8%	12.3%	1.5%
Seattle, Wash.	$2,923	Jan-21	$2,610	-10.7%	$2,895	16.7%	10.9%	-1.0%
Washington, D.C.	$3,127	Dec-20	$2,645	-15.4%	$3,015	9.2%	14.0%	-3.6%
Realtor.com® September 2021 Rental Data - 50 Largest Metropolitan Areas
Metro	Overall Rent	Overall Rent YY	Studio Rent	Studio Rent YoY	1br Rent	1br Rent YY	2br Rent	2br Rent YY
Atlanta-Sandy Springs-Roswell, Ga.	$1,720	22.3%	$1,591	16.9%	$1,618	23.1%	$1,878	22.3%
Austin-Round Rock, Texas	$1,647	25.3%	$1,315	21.2%	$1,523	26.7%	$1,835	26.1%
Baltimore-Columbia-Towson, Md.	$1,701	11.0%	$1,495	19.7%	$1,615	10.6%	$1,809	9.6%
Birmingham-Hoover, Ala.	$1,115	14.4%	$1,056	12.9%	$1,070	12.8%	$1,175	18.1%
Boston-Cambridge-Newton, Mass.-N.H.	$2,517	3.4%	$2,195	6.6%	$2,400	5.5%	$2,775	0.9%
Buffalo-Cheektowaga-Niagara Falls, N.Y.	$1,213	13.9%	$795	0.6%	$1,075	8.0%	$1,390	18.8%
Charlotte-Concord-Gastonia, N.C.-S.C.	$1,543	20.5%	$1,402	22.4%	$1,420	19.1%	$1,685	18.4%
Chicago-Naperville-Elgin, Ill.-Ind.-Wis.	$1,695	2.7%	$1,150	-14.8%	$1,650	3.1%	$1,950	2.6%
Cincinnati, Ohio-Ky.-Ind.	$1,200	12.7%	$1,077	12.8%	$1,143	11.5%	$1,275	8.5%
Cleveland-Elyria, Ohio	$1,140	8.6%	$800	4.0%	$1,081	8.5%	$1,235	10.3%
Columbus, Ohio	$1,185	12.5%	$999	13.7%	$1,118	13.5%	$1,282	12.3%
Dallas-Fort Worth-Arlington, Texas	$1,475	18.2%	$1,269	20.9%	$1,357	20.6%	$1,765	22.6%
Denver-Aurora-Lakewood, Colo.	$1,895	15.5%	$1,590	16.0%	$1,771	17.1%	$2,184	16.3%
Detroit-Warren-Dearborn, Mich.	$1,225	7.6%	$995	11.2%	$1,060	8.9%	$1,375	7.0%
Hartford-West Hartford-East Hartford, Conn.	$1,550	7.6%	$1,220	6.1%	$1,445	4.4%	$1,750	9.4%
Houston-The Woodlands-Sugar Land, Texas	$1,319	9.9%	$1,275	13.7%	$1,209	11.1%	$1,485	9.6%
Indianapolis-Carmel-Anderson, IN	$1,168	13.4%	$1,005	9.2%	$1,084	12.8%	$1,309	18.6%
Jacksonville, Fla.	$1,446	23.7%	$1,130	38.1%	$1,359	28.3%	$1,595	28.0%
Kansas City, Mo.-Kan.	$1,150	7.3%	$920	2.8%	$1,043	6.0%	$1,350	8.0%
Las Vegas-Henderson-Paradise, Nev.	$1,548	25.9%	$925	15.6%	$1,422	27.0%	$1,695	27.0%
Los Angeles-Long Beach-Anaheim, Calif.	$2,850	13.8%	$2,122	10.5%	$2,600	14.0%	$3,395	13.9%
Louisville/Jefferson County, Ky.-Ind.	$1,035	8.9%	$890	2.9%	$980	5.4%	$1,164	17.3%
Memphis, Tenn.-Miss.-Ark.	$1,217	22.9%	$1,100	9.5%	$1,195	24.5%	$1,275	25.4%
Miami-Fort Lauderdale-West Palm Beach, Fla.	$2,500	31.6%	$1,972	27.2%	$2,200	29.4%	$2,894	28.6%
Milwaukee-Waukesha-West Allis, Wis.	$1,417	6.1%	$1,100	2.8%	$1,315	4.0%	$1,660	10.7%
Minneapolis-St. Paul-Bloomington, Minn.-Wis.	$1,510	4.1%	$1,200	0.4%	$1,436	4.4%	$1,835	7.9%
Nashville-Davidson-Murfreesboro-Franklin, Tenn.	$1,576	20.1%	$1,555	13.5%	$1,517	22.0%	$1,620	17.5%
New Orleans-Metairie, La.	$1,350	0.0%	$975	-2.5%	$1,300	0.1%	$1,550	4.0%
New York-Newark-Jersey City, N.Y.-N.J.-Pa.	$2,500	-3.8%	$2,250	-2.1%	$2,300	-8.0%	$2,840	-2.1%
Oklahoma City, Okla.	$850	6.4%	$700	0.4%	$760	7.0%	$899	4.5%
Orlando-Kissimmee-Sanford, Fla.	$1,655	24.5%	$1,450	23.9%	$1,550	26.0%	$1,855	30.5%
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del-Md.	$1,649	3.4%	$1,275	0.8%	$1,580	3.3%	$1,850	3.9%
Phoenix-Mesa-Scottsdale, Ariz.	$1,700	26.4%	$1,284	32.5%	$1,530	28.0%	$1,899	26.6%
Pittsburgh, Pa.	$1,415	11.6%	$1,220	15.6%	$1,376	13.7%	$1,560	13.5%
Portland-Vancouver-Hillsboro, Ore.-Wash.	$1,710	14.1%	$1,395	7.4%	$1,656	13.4%	$1,930	17.0%
Providence-Warwick, R.I.-Mass.	$1,795	8.8%	$1,410	-7.5%	$1,600	4.2%	$1,990	13.2%
Raleigh, N.C.	$1,500	22.4%	$1,376	22.5%	$1,390	23.7%	$1,660	23.9%
Richmond, Va.	$1,299	15.8%	$1,085	13.0%	$1,173	15.0%	$1,454	15.8%
Riverside-San Bernardino-Ontario, Calif.	$2,245	26.5%	$1,365	10.5%	$1,905	23.7%	$2,550	31.8%
Rochester, N.Y.	$1,200	4.3%	$875	4.0%	$1,100	4.1%	$1,325	5.6%
Sacramento-Roseville-Arden-Arcade, Calif.	$1,920	20.4%	$1,708	16.8%	$1,800	21.6%	$2,045	20.4%
San Antonio-New Braunfels, Texas	$1,206	13.9%	$1,039	12.4%	$1,130	17.8%	$1,390	16.9%
San Diego-Carlsbad, Calif.	$2,745	25.1%	$2,129	16.3%	$2,539	27.9%	$3,080	23.4%
San Francisco-Oakland-Hayward, Calif.	$2,895	5.5%	$2,395	7.0%	$2,700	5.5%	$3,370	3.1%
San Jose-Sunnyvale-Santa Clara, Calif.	$3,015	10.8%	$2,431	19.8%	$2,789	12.6%	$3,395	9.6%
Seattle-Tacoma-Bellevue, Wash.	$2,095	16.7%	$1,675	12.8%	$2,097	18.1%	$2,375	13.0%
St. Louis, Mo.-Ill.	$1,150	6.0%	$934	4.9%	$1,115	9.2%	$1,225	6.1%
Tampa-St. Petersburg-Clearwater, Fla.	$1,800	33.3%	$1,612	37.4%	$1,673	39.4%	$2,000	34.2%
Virginia Beach-Norfolk-Newport News, Va.-N.C.	$1,365	14.2%	$1,145	7.0%	$1,324	13.5%	$1,455	16.4%
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.	$2,075	9.2%	$1,680	4.9%	$1,991	8.5%	$2,400	9.3%

Methodology

Rental data as of September 2021 for units advertised as for-rent on Realtor.com^®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. National rents were calculated by averaging the medians of the 50 largest metropolitan areas.

About Realtor.com^®

Realtor.com^® makes buying, selling, renting and living in homes easier and more rewarding for everyone. Realtor.com^® pioneered the world of digital real estate more than 20 years ago, and today through its website and mobile apps is a trusted source for the information, tools and professional expertise that help people move confidently through every step of their home journey. Using proprietary data science and machine learning technology, Realtor.com^® pairs buyers and sellers with local agents in their market, helping take the guesswork out of buying and selling a home. For professionals, Realtor.com^® is a trusted provider of consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS^®. For more information, visit Realtor.com^®.

Media Contact
rachel.conner@move.com

 

View original content:https://www.prnewswire.com/news-releases/realtorcom-september-rental-report-big-tech-city-rents-are-back-301410707.html

SOURCE Realtor.com

FAQ

What is the average rent increase in major U.S. tech cities as of September 2021?

As of September 2021, rents in major U.S. tech cities increased by an average of 6.3% compared to March 2020.

What are the current trends in U.S. rental prices?

Rental prices nationally grew by 13.6% year-over-year for the second month in a row, with a national median rent of $1,654.

Which U.S. city saw the highest rent increase in September 2021?

Austin, Texas, experienced the highest rent increase in September 2021, with a rise of 22.3% year-over-year.

How did rental prices in New York change compared to last year?

In September 2021, rental prices in New York decreased by 3.8% compared to the same month last year.

What could happen to rental prices in winter 2021?

Experts suggest that if rental prices continue to align with home listing prices, a cooling in rent growth may occur during winter.