The cost of rent skyrocketed in the COVID-19 pandemic's second year as homes for sale remained scarce. Millions of American millennials who couldn't afford to rent were forced to squeeze into relatives' homes.
Rentlodex ranked cities with the highest rent increases from December 2021 to 2022 using data from Apartment List. The analysis includes U.S. cities with 100,000 or more residents. Apartment List bases rent estimates on the median price of new leases signed and paid per month. Actual percentage change data is more precise than what's listed, so there are no true ties.
At the peak of rental increases in 2021, some New York City tenants saw rents increase by 60% or more. In the fast-growing Phoenix suburb of Gilbert, Arizona, rents more than doubled in 2021 compared to the year prior.
Some landlords and property managers pointed to rising home prices and property taxes, and a shortage of rental units available, as giving ground for rental increases. In addition, the federal government and many states and cities banned evictions during the height of the pandemic for public health reasons, so fewer rental properties became available as a result of evictions.
In December 2022, national median rent grew about 4%, which is still elevated but inching closer to the roughly 3% year-over-year growth seen in the years before the pandemic.
The pace of growth tapered in the first part of the year, but rents are still climbing. Inflation pressures are also contributing to calls for local rent control laws and a discussion about instituting federal rights for renters.
The Department of Justice is also looking into potentially anti-competitive business practices among property management companies. That inquiry comes after a 2022 ProPublica investigation raising questions about whether property managers who share software systems were acting as a rental cartel.
Renting is an ideal situation for people who would rather not bother with the upkeep of their home or who aren't particularly attached to their locale and may move in the future. From 2008 to early 2021, the cost of monthly rent compared to a monthly mortgage payment for a single-family home had been nearly identical, according to one study by John Burns Real Estate Consulting. The red-hot housing market of the pandemic era flipped that, making monthly rent the comparably affordable option in 2021 and 2022, per the firm's analysis.
The only time rents have actually decreased in real dollars, on average, in the last two decades was in late 2009 amid the aftermath of the housing crisis, according to the Bureau of Labor Statistics' rent price index.