A return to cities and a tight housing market upset the rental landscape in 2022, contributing to a 16.5% jump in the national average rent price. Although prices started stabilizing between April 2022 and April 2023 with a more modest 5.3% increase, some renters are still facing bigger price hikes.
The data science team at Insurify referred to Zillow’s Observed Rent Index (ZORI) to identify the metro areas with the greatest rise in rental costs. Our study includes data from the 200 most-populated metropolitan areas in the U.S. between April 30, 2022, and April 30, 2023.
You might expect notoriously rent-burdened areas like New York, Los Angeles, and San Francisco to top our list, but most renters facing double-digit jumps live in metro areas with a population of fewer than 500,000. Below, we dig into why these once-affordable cities are experiencing a surge in rent costs.
- Rent prices continued to rise an average of 5.3% across the U.S. between 2022 and 2023, but increases have slowed since the post-pandemic rush back to cities. Between 2021 and 2022, rents increased by 16.5%.
- Small to midsize cities saw the greatest rise in rental costs. Only three of the top 10 metro areas on this list have a population of more than 500,000. Notoriously expensive cities, like New York and Los Angeles, accommodate millions of renters but experienced more modest increases of 6.5% and 3.7%, respectively.
- Only one city in our top 10 had a higher rent price than the national average of $2,018. In Cape Coral, Florida, renters pay $305 more per month than the national average. However, most renters facing rapidly rising prices aren’t living in the cities with the highest rents.
- Southern cities dominated our list, with six in the top 10. The surge could be influenced by rapid population growth in Southern cities. Insurify’s housing market trends report noted this great southward migration based on 2022 U.S. census data.
- Rent prices in a few cities bucked the national trend and fell in 2023. Of the 200 largest metropolitan areas in the U.S., only four saw prices decline between April 2022, and April 2023. Bremerton, WA, a small city in the Puget Sound region, experienced the largest decrease in the country, at 1.5%. Still, Bremerton renters paid an average of $1,860 monthly — $604 more than those in Lynchburg, VA, which had the biggest increase in rent prices.
Cities with the largest rent increases in 2023
Rent prices continued to rise across the U.S. in 2023, but these 10 cities experienced the most significant jumps in rental costs.
10. Reading, Pennsylvania
- Increase in rent between 2022 and 2023: 10.8%
- Average monthly rent: $1,262
Located in the heart of scenic Berks County, Reading earned the final spot on our list of areas with the greatest rise in rental values. Woodlands and hiking trails, like Nolde Forest and Hawks Mountain Sanctuary, surround the small city. Reading’s multiple art and history museums provide family-friendly activities, so indoor enthusiasts won’t feel left out.
Despite a 10.8% increase between 2022 and 2023, Reading renters pay $756 less than the monthly national average of $2,018. Tight inventory could be influencing rising rents – 60% of residents rent rather than own homes in the city, according to U.S. Census data.
9. Utica, New York
- Increase in rent between 2022 and 2023: 11.1%
- Average monthly rent: $1,204
The small city of Utica, nestled in central New York, offers a blend of urban amenities and natural beauty. The nearby Adirondack Mountains draw outdoor enthusiasts, while culture lovers enjoy the Munson-Williams-Proctor Arts Institute, Utica Symphony Orchestra, and historic Stanley Theater.
Between 2022 and 2023, Utica’s average monthly rental price increased by $121. To combat the lack of low-cost housing, New York Gov. Kathy Hochul announced a $67 million project to preserve and rehabilitate the historic Olbiston Apartments. The redesigned building will add 153 affordable units to the city.
8. Madison, Wisconsin
- Increase in rent between 2022 and 2023: 11.5%
- Average monthly rent: $1,489
Located about an hour west of Milwaukee, Madison offers residents a mix of urban amenities and quiet neighborhoods. The University of Wisconsin-Madison likely drives demand for affordable rentals, with nearly 50,000 enrollments in fall 2022.
In addition to thriving art and food scenes, Madison is a burgeoning tech hub. The Brookings Institution think tank recognized Madison as an area of high growth in the technology industry, with the potential for more development. While a thriving tech sector brings higher wages, it can also contribute to surging rent prices.
7. Tallahassee, Florida
- Increase in rent between 2022 and 2023: 11.7%
- Average monthly rent: $1,417
Tallahassee came in seventh on our list, with a rental increase rate that was more than double the national average. Located 22 miles inland from the Gulf of Mexico, the city is known for robust outdoor recreation, family-friendly activities, a thriving restaurant scene, and bustling nightlife.
Tallahassee is home to Florida State University, which had an enrollment of nearly 45,000 students in 2022. The city’s population skews young, with a median age of 27.2 years. College students can drive up demand for low-cost rentals, but a new affordable housing project backed by the American Rescue Plan for the Orange Avenue Redevelopment could provide relief in the form of 290 affordable units.
6. South Bend, Indiana
- Increase in rent between 2022 and 2023: 11.9%
- Average monthly rent: $1,283
The Midwestern city of South Bend still has affordable rent compared to nearby Chicago, but prices jumped 11.9% in 2023. Adjacent to the prestigious University of Notre Dame, the city has a highly educated population of young professionals. A thriving arts scene and outdoor recreation appeal to residents of all ages.
In recent years, South Bend has become a tech hub, attracting innovative startups, like Aunalytics and Vennli, to the region. City and state officials have supported multiple affordable housing projects to continue drawing in entrepreneurs, including two new developments adding 114 low-income units that will be available to residents of the city who make 30%–60% of the area’s median income.
5. Charleston, South Carolina
- Increase in rent between 2022 and 2023: 12.0%
- Average monthly rent: $1,979
The midsize city of Charleston has a lot to offer renters, even as prices rise. Residents enjoy mild winters and can cool off in five beautiful nearby beach towns on balmy summer days. With a bustling historic district lined with shops and restaurants as well as quieter residential neighborhoods, the city has something to offer every lifestyle.
Charleston has the second most expensive rent in our top 10, with an average monthly price of nearly $2,000. In 2023, Charleston County pledged $11.5 million to increase the supply of affordable housing. The developments that received county support will create 308 additional low-cost apartments.
4. Mobile, Alabama
- Increase in rent between 2022 and 2023: 12.6%
- Average monthly rent: $1,200
Situated along the Gulf shoreline, Mobile is a picturesque city where locals enjoy gorgeous architecture, fresh seafood, and fun festivals, including the oldest Mardi Gras celebration in the country. Like many Southern cities on our list, Mobile has a low cost of living, mild winters, and less population density than its East Coast counterparts.
Though values increased 12.6%, Mobile residents still get a steal on rent, with an average price that’s $818 per month lower than the national average. Local officials teamed up with the U.S. Department of Housing and Urban Development (HUD) to combat surges with a 96-unit affordable housing complex that broke ground in 2022.
3. Cape Coral, Florida
- Increase in rent between 2022 and 2023: 13.1%
- Average monthly rent: $2,323
With more than 400 miles of canals, pristine beaches, and year-round sunshine, Cape Coral’s stunning natural beauty attracts many outdoor enthusiasts. The city boasts a burgeoning art scene, top-rated golf courses, and family-friendly activities. All of those amenities come at a price.
Cape Coral was the most expensive place to rent in the top 10, with an average rent price that’s 15% higher than the national average. Even if landlords raise prices, they likely won’t have trouble filling units. Cape Coral was the ninth fastest-growing city between 2021 and 2022, according to the U.S. Census Bureau.
2. Kingsport, Tennessee
- Increase in rent between 2022 and 2023: 14.5%
- Average monthly rent: $1,178
The quiet city of Kingsport might not be the type of place you would expect to find rent gouging. However, residents experienced a 14.5% jump in 2023 — a smaller surge than the 19% rise in the city last year. The city had 2,500 housing units under development in 2022, which could mitigate rising rents by increasing supply.
Though natural beauty also surrounds Kingsport, it’s an industrial city supported by pulp and paper mill Dotmar and plastics manufacturer Eastman Chemical Company. Both major employers announced expansions totaling $600 million in 2021. Business growth coupled with a lockdown-inspired desire for outdoor space could contribute to rising rental values in the area.
1. Lynchburg, Virginia
- Increase in rent between 2022 and 2023: 17.3%
- Average monthly rent: $1,256
Bordered by the beautiful Blue Ridge Mountains, the picturesque city of Lynchburg topped our list, with a 17.3% rise in rent values between 2022 and 2023. Despite the increase, the average rent in Lynchburg is still 38% lower than the national average.
Lynchburg offers an appealing balance of nature and culture, with more than 40 miles of urban trails and a riverfront downtown full of art galleries and historic sites. Home to five colleges and universities, the city has a low median age of 28.5 years, which likely contributes to increased rental demand.
The data scientists at Insurify referred to Zillow’s Observed Rent Index (ZORI) to determine the cities with the greatest rent value increases in 2023. ZORI measures the mean of the 40th to 60th percentile listed rents in a given metropolitan area, weighted to match the housing distribution of that area.
Insurify’s analysts calculated the percent increase in mean monthly rental costs between April 30th, 2022, and April 30th, 2023, for the 200 most populous metropolitan areas in the U.S. Of these cities, Insurify’s data science team highlighted the 10 with the largest increases in ZORI mean rents during this period as the cities with the greatest rise in rental values in 2023.
Average rental values in the U.S. increased less drastically in 2023, but renters in some cities experienced hikes that were comparable to 2022. Small to midsize cities emerged as the most affected. Rising rents also hit Southern cities harder than other regions.
While return-to-office mandates brought many workers back to major metropolitan areas, remote employees may add to the demand in smaller cities by staying in places with a lower cost of living.
Most cities with the highest rent increases pay significantly less than the $2,018 national average. However, large rent increases burden more residents in cities with high poverty rates.
In Reading, PA, where rent prices spiked 12.3%, nearly a third of residents live in poverty. The city’s median household income in 2021 was $38,738, according to U.S. Census data. If Reading renters paid the average rent of $1,262 and earned the median income, 39% of their household income would go to rent.
Fortunately, many cities in our top 10 have introduced affordable housing projects to increase the supply of low-cost units. Time will tell if these developments are enough to curb rising prices.
This article originally appeared on Insurify and was syndicated by MediaFeed.
- Hot dogs, apple pie & other classic American foods that aren’t American at all
- Skip the crowds this summer at these secret national parks
Like MediaFeed’s content? Be sure to follow us.