The warning signs have been here for months now: rents are on the rise! Wether you’re looking at apartments or homes, the rental market was red hot in 2021—and Redfin’s latest data examines just how high the heat went.
Per December numbers, the average monthly listed rents in the U.S. increased 14.1 percent year-over-year to $1,877 in December, the largest annual jump since at least February 2019. Looking at November 2021, rents were up just 0.3 percent.
Year–over-year rent-price increases outpaced year-over-year mortgage payment increases for new homebuyers in just 16 of the 50 largest U.S. metro areas in December.
“The growth in mortgage payments has been driven by both climbing prices and climbing mortgage rates,” said Redfin Chief Economist Daryl Fairweather. “And those rising mortgage costs push more potential homebuyers into renting instead, which pushes up demand and prices for rentals. Mortgage rate increases are accelerating, which will cause both mortgage payments and rent to grow throughout 2022.”
The East Coast and South saw the largest rent increases in terms of metro areas. Austin saw the largest increase with a 39.9 percent year-over-year increase, followed by Nassau County, NY; New York, NY; Newark, NJ and New Brunswick, NJ.
While no California cities made the top 10 list, Los Angeles was among the top 30 metro areas to see significant rent increases. Per the December report, the average rent in L.A. stands at $3,394, up 9.6 percent year-over-year.
Only Kansas City, MO saw rents decline year-over-year, according to Redfin, down .9 percent.