Steepest Hikes Seen in Smaller Sun Belt Regions
By Katie Burke and Nicole Shih CoStar News
August 5, 2022 | 11:51 AM
Apartment tenants in markets large and small haven't been able to avoid record rent increases over the past year as rates jumped in both established coastal markets and across the Sun Belt, areas with rapid population growth since the onset of the pandemic in early 2020.
As those shifts settle into the multifamily market's long-term trajectory, rents across the United States have climbed roughly 8.5% over the past year, according to CoStar data, on top of the nearly 11.5% increase recorded over the prior 12 months.
At the highest end, tenants in Sun Belt states such as Florida, Nevada and South Carolina are contending with increases as high as 20% compared to this time last year, prompting concerns about affordability among housing advocates as well as questions among developers over whether the growth rate will stick.
Yet even with apartment renters settling into cities they moved to as a result of the pandemic, with many fleeing urban markets in search of cheaper rents or more spacious alternatives, the rise in return-to-office initiatives has also prompted a return to large cities.
Apartment rents in already expensive markets such as San Diego, Miami and Silicon Valley's San Jose have all climbed by more than 10% over the past year, according to CoStar data, the first double-digit increase since the beginning of the pandemic.
Rent growth is expected to moderate slightly as demand begins to cool and tenants' budgets are stretched to their limit. A CoStar analysis predicts rent growth for all of 2022 will come in just shy of 7%, down from the current pace of about 11.5%. Even so, this year is expected to rank as the second-highest rent growth on record, behind 2021.
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