Renting in the Suburbs Has Become Nearly as Expensive as It is in Cities
Realtor.com’s July report suggests that relief could be coming.
Realtor.com says renters are “stuck between a rock and a hard place” as rents continue to rise – suburban rents, especially – and residents are struggling with persistent inflation costs.
Driven by migration away from expensive city centers during the pandemic, the rental price advantage of living in the suburbs (vs. urban areas) has shrunk by 52.9% compared to three years ago, according to the Realtor.com monthly rental report released today.
The U.S. median rental price hit an all-time high for the 17th month in a row in July at $1,879; and, on average, renters saw a $160/month increase in rent at renewal. New leases were going for a $300 per month hike.
A new survey from Avail (part of Realtor.com) said landlords are soon to be adjusting to renter budgets impacted by inflation. Its data also showed the rent growth moderating.
Rent Premiums Not Just in Urban Hubs
Realtor.com Chief Economist Danielle Hale said in prepared remarks, “Whether in a downtown area or suburb, staying put or making a change, renters are stuck between a rock and a hard place when it comes to affordability.
“Compared to three years ago when rental price premiums were typically concentrated in urban hubs, renting is now nearly as expensive in the suburbs, where the rise in remote work has driven a surge in demand.
“At the same time, the days of smaller premiums for downtown rentals are numbered, as a return to in-office work and city life is sparking a relative uptick in urban rent growth.
“Put simply, renters are feeling it everywhere, but there may be some relief ahead.”
When asked why they plan on raising rents, landlords told Realtor.com that higher costs for property management expenses, including tax payments (79.1%), maintenance and upkeep (75%) and utilities (45.9%) were factors.