Apartment Rents Keep Rising As People Are Priced Out of Homeownership

Everyone needs a place to live, so it’s not surprising that as for-sale housing prices continue to climb, rental properties are in high demand, which is pushing rents higher.

The average U.S. asking rent rose $5 in April to $1,709, and single-family home rents hit an all-time high of $2,089, according to Yardi Matrix’s National Multifamily Report for April. 

“Solid demand has kept multifamily rents rising in 2023 but at a slower rate than previous years,” the report states. “Demand is boosted by the tight job market and strong consumer balance sheets, although the question is how much longer those conditions will persist.”

The national occupancy rate remained unchanged at 95%, an indication that demand persists even amid fears of a recession.

In a separate study, moving company expert MovingFeedback analyzed Zillow data to determine which metropolitan statistical areas (MSAs) have seen the biggest increases in average rent prices over the past three years.

“Rent demand is strong in the U.S. with rising homeownership costs,” a spokesperson for MovingFeedback said. “It is estimated that there is a shortage of 7.3 million affordable rental homes for those with low incomes. This paired with rising inflation means that rent prices have continued to soar. 

The study found that Colorado cities saw the steepest increases, with rents rising 54% over the last three years. In the first three months of 2020, the average rent in the state’s MSAs was $2,440, compared to an average of $3,758 in the first three months of this year.

Florida ranked second with a 46.7% increase in rent prices in three years. Renters in Florida’s MSAs were paying an average of $1,448 between January and March 2020 and are now paying $2,126.

Montana’s MSAs saw the third-highest increase in average prices for renters. In the first three months of 2020, rents were $906. They’ve risen to $1,303 for the first three months of this year.

Rental rates for MSAs in West Virginia rose 12% since 2020 — the nation’s smallest increase in rental rates.

“This data reveals huge disparities in pricing across the U.S. with cities in Colorado and Florida seeing rent increase by around 50% compared to states like West Virginia and Iowa, which have seen average increases below 15% over the past three years,” the MovingFeedback spokesperson said.

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