American cities where rents are rising fastest

April 14, 2021

Housing markets across the United States had an unexpected boom in 2020 that’s continued into 2021, despite the impact of the pandemic on the United States economy over the past year.

Migration out of large metropolitan areas into smaller, suburban cities, paired with historically low mortgage interest rates, has resulted in an unprecedented demand for housing nationwide. Across the country, real estate markets for homebuyers are hot. And in certain cities, rental markets are also following suit.

Image Credit: Zillow.com.

COVID-19 and Rents

Unlike most U.S. housing markets in 2020, the majority of rental markets across the nation did not see landmark surges in value or demand. Soon after COVID-19 swept the nation in the spring of 2020, a federal eviction moratorium was established to keep financially vulnerable tenants housed during stay-at-home orders.

This order, in effect from September 4, 2020 until March 31, 2021 (following the CARES Act eviction moratorium, in effect between March 27, 2020, and July 24, 2020), prevents landlords from raising rents for existing tenants and evicting tenants who are unable to make rent.

In fact, many major metropolitan areas such as New York City, Seattle, and San Francisco with high rent prices prior to the pandemic saw significant declines in rent values over the course of 2020.

Many former big-city dwellers with the necessary financial means and flexible work-from-home lifestyles have been leaving major metropolises for more picturesque and spacious settings. In some of these more scenic cities, rent values for units available on the market have increased.

While rising rent values are evidence of a flourishing real estate market, it’s important to note that this also means that apartments in these cities are less accessible to lower-income renters who may become priced out of these locales.

To see where renters are driving up demand the most, the data scientists at Insurify looked to national rent data to identify the cities with the greatest increase in rent values in 2021.

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Insights

National averages. Across all U.S. cities, the average percent change in rent between September 2020 and February 2021 was 0.42%, indicating that prices overall remained relatively stable. Nationwide, the median rent cost as of February 2021 is $1456.
Southern stronghold in the top twenty rankings. While the twenty cities with the greatest increases in rent values in 2021 span from the East Coast to the West Coast, eighteen of them are located in the southern United States. Most notably, Florida has the highest representation of any state on the list, with seven cities to make the top twenty.
Higher-end rents, to start. Rent prices in the cities that experienced rising rent costs over the past six months tend to be higher-than-average. Fourteen of the twenty cities in the rankings have a median rent cost that’s at least 8 (and at most, 36) percent above the national average. Those with the financial means and privilege of work-from-home flexibility are able to prioritize luxuries like more space and even seaside views, which is seen in the rent value increases of six coastal Florida cities.

Image Credit: Insurify.

Methodology

The data scientists at Insurify, a site to compare homeowners insurance, referred to Apartment List price estimates to determine the cities with the greatest rent value increases. Apartment List is an online rental platform that releases monthly cost data for rentals on both state and city level-markets across the United States.

To calculate the relative change in average rent prices into 2021, Insurify’s researchers took the percent change between the median contract rent across new leases signed between September 2020 and February 2021 across the markets of 397 U.S. cities. As U.S. rental markets throughout the entirety of 2020 have experienced a multitude of changes, Insurify’s analysts chose to focus on the latter months of 2020 and the first months of 2021 to capture the landscape for renters going into the new year.

City population data was taken from the U.S. Census Bureau. In this study, cities were defined based on the United States Census Bureau’s classification of an “urbanized area,” an urban area with a population over 50,000. The median rent cost in February 2021 in each city was also provided by Apartment List. The percentage of renters in each city comes from City-Data.

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