Largest City Rents Increase But at a Lower Pace

HOUSTON—The beginning of the rental season recorded rent increases of 3.2%, the lowest annual growth in more than six months, according to a RENTCafe monthly report with data compiled from actual rents charged in the 253 largest US cities. Compared to last year’s figures, the March average national rent of $1,430 per month is $44 higher.

Here’s how the large, mid-size and small markets stacked up:

Phoenix and Las Vegas rent hikes dominate among larger cities. Aggressive increases in the Southwest have kept Phoenix and Las Vegas at the top of the list when it comes to rent growth in the past year (7.8%). And, rent growth in Mesa, AZ continues to outshine that of other mid-sized cities. With a 9.3% growth, the average monthly rent in Mesa at $1,009 has reported the sharpest year-over-year increase among mid-sized cities.

The weakest increases were in Houston (0.9%), followed by Manhattan and Portland, OR, both with a 1.6% year-over-year uptick.

The fastest and slowest yearly rent changes occurred in small Texas cities: Midland and Odessa are the only cities with increases of more than 10%, while Pearland is the only city where rent decreased by more than 2%. Following a 14.6% annual increase in March, rent prices in Midland reached $1,609, while the average rent in Odessa reached $1,418 after a 13.3% jump. However, rent prices in the area are actually cooling compared to the middle of last year, when prices were rising as fast as 30% year-over-year.

“With the oil and natural gas sector driving local economy in the Permian Basin, the area has been an active ground for rental market fluctuations,” Alexandra Ciuntu, the author of the RentCafe report tells GlobeSt.com. “The best examples are Midland and Odessa, where rent performance is in tandem with the ups and downs in the oil industry, which accounts for a large share of the local job market. With the Houston rental market continuing to evolve nearby, Pearland is a less expensive alternative. Rent prices there are around $1,280 following a 2.3% drop compared to last March, after growing slightly or stagnating throughout the course of last year.”

The reports from RENTCafe are based on data that comes from Yardi Matrix, an apartment information service and a sister division of RENTCafe. Data is compiled from actual rents charged in market-rated apartment communities of 50 units and larger in more than 130 US markets.