States Where Rent is Increasing | BiggerPockets Blog

Rental prices tend to increase in the spring and summer as more people look for new homes to rent, but lower demand combined with new inventory keeps rental prices roughly flat nationwide. In some states, however, the influx of new residents It causes average rents to grow, according to May a report From The trend is clear: people are moving to areas with strong economies that still have reasonable rents and housing prices. In the states where rents are rising the fastest year-over-year, the median rent is still relatively low compared to the national average.

Nationwide, rents rose just 0.29% year-over-year in April. The month-on-month decline in March-April was -0.23%, after rising 1.77% from the February-March low. The national average rent is now $1,967. Monthly declines have slowed, but that may be due to the season — there’s no telling if the national average rent has finished its plunge. However, in approximately 79% of markets, rents are still growing year-over-year. And in some Southern and Midwestern states, rents are rising at double-digit rates.

The countries with the highest annual rental growth rate

state Rental growth year on year Monthly change in rent Average rent
South Dakota +28.59% +2.9% $1,203 USD
Mississippi +24.69% +1.48% 1185 USD
yeah +16.76% +2.35% 1126 USD
Arkansas +14.47% -0.62% $1,018
New Hampshire +14.28% -2.03% 1896 USD
North Dakota +12.42% -1.31% $1,058
Nebraska +12.00% +1.25% $1,327
Michigan +9.72% +0.99% $1,369
North Carolina +9.38% +0.22% $1,658
Indiana +9.24% +0.06% $1,267

In all of the 10 states where rent prices are rising the fastest, the median rent is lower than the national average. Most states are located in the south and midwest, with the exception of New Hampshire. South Dakota leads the pack with an annual increase of nearly 29% as well as a monthly increase of 2.9%. housing costs And Property Taxes It’s rising in the state more quickly than anywhere else, with cities like Sioux Falls attracting new residents in droves.

Countries with the largest decline in rental prices year-on-year

Only nine states saw rent declines year-over-year in their cities. In many Mountain West states, rents are starting to cool off after years of an early pandemic immigration boom. For example, both Phoenix and Austin were pandemic boomtowns and now rents are falling in those cities, which could be driving the downward trend in their states.

state Rent decreases year on year Monthly change in rent Average rent
Idaho -5.37% -0.95% $1,635
nv -4.78% -0.10% $1,568
Arizona -4.29% -1.95% $1,459
Washington -4.15% +1.74% $2,331
Illinois -2.21% +1.81% $1,835 USD
Texas -1.75% -0.9% $1,446
Kansas -1.58% +0.18% 1110 US dollars
Maryland -0.67% +0.36% $1,883 USD
Oregon -0.11% -1.99% $1,766

Notoriously high rents are flat year-on-year in California, while they’re rising in Florida, New York, and Tennessee. While rent is down year-over-year in only about 21% of markets, it’s roughly 43% down month-over-month.

their rent increases refrigerated nationwide due to an oversupply of multi-family housing, along with recession fears that have limited demand for rental homes as more people stay or move in with family or roommates. And that could continue, especially if the US economy falls into recession. The rental market is just as uncertain as the housing market – although there are some investment companies It is betting on a long-term rental boom in 2024 and is looking at construction projects for rent as an attractive investment opportunity.

bottom line

Rental rates have fluctuated since last fall but are roughly flat year on year. Existing Home Sales As it was growing and shrinking, uncertainty remains about the fate of the US economy. The Federal Reserve can investigate Soft landingOr unemployment could rise, and housing prices could fall even further. Investors need to use all the information available to them, including changes in rental prices, to make their best guesses about how individual markets will perform. But they must also be prepared for all outcomes and go into investment decisions with a backup plan.

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Note by BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.