Yahoo Finance In Less Than a Decade, You Won’t Be Able To Afford Rent in These Cities
According to RentCafe, the average cost of an 899-square-foot apartment is $1,713, but rental prices can vary immensely based on factors like unit type, condition, age and location. Roughly a quarter of apartments cost over $2,000 a month — and that’s not even including extras like pet rent, reserved parking fees or valet trash.
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In states where the cost of living is already astronomical — like Massachusetts, Hawaii and New York — rentals can easily exceed $2,500 a month. On the other hand, historically cheaper locations — like Oklahoma, North Dakota and Arkansas — average closer to $1,000 a month in rental prices.
That being said, rent keeps going up — but not always where you’d expect.
“In the past 5 years, average rents have rocketed to record highs in almost every major U.S. metro area. But it’s not necessarily the most expensive cities that have seen the biggest increases in rent; in many cases, it’s the ones with historically more affordable rents where the biggest shifts are happening,” said Matt Hutchinson, director of communications at SpareRoom.com.
Here are the top U.S. cities where rental prices have gone up the most in recent years and where, if patterns continue, you might not be able to afford rent in the next decade.
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Cities With the Biggest Rent Hikes
Hutchinson shared proprietary data about how much rental prices have gone up from the first quarter of 2019 to the first quarter of 2024, specifically indicating locations with the biggest rent hikes. The following results are based on “roommate rents” — the average monthly rent for a single room in a shared house or apartment — in key metro areas:
Riverside, California — 50.7%
Phoenix — 48.2%
Las Vegas — 42.7%
Tampa, Florida — 42.1%
San Diego — 41.3%
Miami — 40.2%
Charlotte, North Carolina — 40.2%
Virginia Beach, Virginia — 39.9%
Philadelphia — 38.7%
Orlando, Florida — 38.2%
As you can see, each location has seen an increase in the double digits.
“Roommate rents are a key indicator of how renters are coping, as they’re usually the most affordable living situation available to people. That means if rents are rising fast for roommates, people are struggling at the lower end of the housing spectrum, which can only filter upwards,” Hutchinson said.
“If rents continue to rise at the same rate, it’s hard to imagine any major U.S. metro area or city being genuinely affordable for renters in 10 years,” he continued. “That not only has a huge impact on individuals, it’s also incredibly worrying for the economic growth of the country as a whole. The number one reason people move is for work, but if people are staying put to avoid massive rent hikes, the U.S. workforce becomes inflexible, making growth through jobs incredibly hard to deliver on.”
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Other Key Cities Where Rent Is Becoming Unaffordable
These aren’t the only U.S. cities where the average person might struggle to afford rent in the coming decade. Todd Stearn, founder and CEO of The Money Manual, cited a recent SmartAsset study indicating a couple of other locations with some steep rent increases from 2023 to 2024.
“Columbia, South Carolina, saw the steepest rent hike over the year, at 8%. And since February of 2019, rent there has surged a whopping 43.5%,” Stearn said. “Newark, New Jersey; Wichita, Kansas, and Rochester, New York, all tied for second place with 7.6% increases over the year and increases since 2019 of 36.3%, 31.7%, and 35.2%, respectively.”
There are also other cities where rent has skyrocketed in the past five years — and is likely to continue to rise. Here’s how much prices have increased during this period and the average rental price in each location:
Naples, Florida — up 63.1% for an average rent of $2,972
Knoxville, Tennessee — up 59.1% for an average rent of $1,818
Saint Petersburg, Florida — up 55.6% for an average rent of $2,053
Miami — up 55% for an average rent of $3,067
New York City — up 19.3% for an average rent of $3,393
“If you haven’t been watching real estate too closely, these numbers may seem shocking,” Stearn said. “Inflation is a big factor, of course, as landlords pass on their increased costs to maintain properties. But these cities are also seeing some of the biggest growth in the country as people flock to them for their strong job markets and desirable lifestyles, so that increased demand is a huge contributor as well.”
The Effect of Rising Rent on the US Population
While it’s still possible to find affordable rental options in even these key cities, it’s become increasingly difficult to manage the rent alone. Even with roommates, many people still worry about being able to keep up with the price hikes. And it’s not just that — higher rental prices have had a major impact on big moves people make in their lives.
“We surveyed 1,175 roommates in the U.S. last year about their experience of the rental market,” Hutchinson said. “Here are the headlines:
98% said they were concerned about the current state of the rental market.
The biggest concern (86%) was high rents.
95% said the prospect of apartment hunting in the current rental market made them feel anxious.
75% stayed in their current house/apartment despite wanting to move.
90% of those said that the housing available was out of their budget.
32% said they’d turned down a job offer to avoid having to move.”
While it’s possible for rent prices to go down in the next decade, it’s wise to keep an eye on recent and upcoming changes in the housing market. Especially if you plan to relocate or strike out on your own somewhere, knowing the trends can help you prepare ahead of time — and potentially avoid a shock when you see the rental prices in your chosen neighborhood.
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This article originally appeared on GOBankingRates.com: In Less Than a Decade, You Won’t Be Able To Afford Rent in These Cities
