Goodbye City Life: Rising Rents Match Homebuying Hotspots
The realtor.com® Monthly Rental Report released on February 18, 2021, indicates a shift in rental trends as renters favor smaller markets with quality amenities. The U.S. median rent rose by 0.8% to $1,442 in January 2021, marking a potential floor for growth. Notably, New Orleans saw an 18.2% increase in median rent, while tech hubs like San Francisco experienced significant declines, including -12.6%. The report highlights that remote work flexibility is driving demand toward affordable markets, with several smaller cities witnessing double-digit rent increases.
- U.S. median rent increased by 0.8% to $1,442, indicating stabilization.
- New Orleans saw the highest median rent increase at 18.2%, highlighting demand.
- Riverside and Sacramento are emerging as affordable alternatives to Los Angeles and San Francisco.
- Tech hubs like San Francisco and San Jose faced significant rent declines of -12.6% and -11.1%, respectively.
- Overall rent growth across the U.S. remains below pre-COVID levels of 3.2%.
SANTA CLARA, Calif., Feb. 18, 2021 /PRNewswire/ -- Renters, much like homeowners, are favoring smaller more affordable markets that offer highly rated schools, strong local economies and more space over expensive tech hubs, a trend that is pushing rents up in many of the same markets where home prices are rising the most, according to the realtor.com® Monthly Rental Report released today.
"Although rents across the U.S. have been growing at a slower pace since the onset of COVID-19 and the major tech hubs continue to see declines, some markets are seeing rents grow by double digits," said realtor.com® Chief Economist Danielle Hale. "Many of the same factors that attract homebuyers to an area -- highly rated schools, job opportunities, affordability and quality of life -- attract renters. Like homeowners, the pandemic has given many renters the freedom to work remotely, and the rental trends reflect that reality."
In January, the U.S. median rent, which is calculated by averaging the median rent of the 50 largest metros, was up
Seven of the top 10 metros with the largest rent increases in January -- New Orleans*; Sacramento, Calif.; Rochester, N.Y.; Cleveland; Riverside, Calif.; Cincinnati and St. Louis -- were also among the metros where home prices grew more than
Renters typically have more flexibility to move, and with remote work allowing many people to live anywhere, markets that offer affordability are in hot demand.
In California, Riverside and Sacramento have become desirable alternatives to the pricey Bay Area and Los Angeles housing markets. Despite a sizable
Four of the top 10 markets with the largest year-over-year rent increases in January are located in the Midwest, a region that in recent years has attracted affordability-minded homeseekers looking for an alternative to the pricer coastal markets.
Markets With the Largest Rent Increases in January 2021
Metro | Median Rent | Rent YoY |
Markets With the Largest Rent Decreases in January 2021
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Rental Data - 50 Largest Metropolitan Areas January 2021
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*Editor's Note: New Orleans' exceptional year-over-year growth in median rent was driven by shifts in the underlying inventory of rental units. The number of studio units has declined by
Methodology
Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, one-bedroom, or two-bedroom units. National rents were calculated by averaging the medians of the 50 largest metropolitan areas.
About realtor.com®
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Media Contact
Janice McDill, janice.mcdill@move.com
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SOURCE realtor.com
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