Rents hit all-time high, increases accelerate into the summer

Janna Herron, Personal Finance Editor at Yahoo Money, breaks down the increases in rent amid pandemic recovery.

Video transcript

- Well, we saw rent in many cities fall during the pandemic, but now, rents in the United States have risen to their highest level in two years. Joining us for today's Your Money segment, we have Yahoo Finance's Janna Herron. So Janna, tell us what is happening here. I thought rent was supposed to be incredibly low for us to be able to snag some deals. A two-year high, what's happening there?

JANNA HERRON: Yeah, it's really not a renter's market anymore. The national median rent increased 5.5% in May, up to $1,527 a month. And that's the highest level in two years, and also the highest level on records kept by realtor.com. It's also the fastest rate of increase since March 2020, before the pandemic has started. So basically, things are going back to normal. What's also interesting is single-family rents have also jumped 5.3% year over year, biggest annual gain in 15 years.

So where are we seeing these rental increases? Mostly in the mid-tier cities. They're leading the way when it comes to rental increases because renters are seeking out affordability. So we're looking at places like Riverside, California, Memphis, Tampa, Phoenix, Las Vegas and Atlanta. But some of the biggest cities in the United States are still lagging in rents. So like in New York, San Francisco, San Jose, you're not seeing those rental increases year over year. You are seeing them month over month, but they're still lagging that pre-pandemic level. So if you want to get a good deal, maybe those are the areas you want to go.

- How is this hot housing market sort of playing into what we're seeing in the rental market right now?

JANNA HERRON: Absolutely. It's a huge factor, especially for the single-family rentals. If you can't buy a home right now, which is really hard to do because there's not enough homes on the market, you have to live somewhere. So you want to get that rental, and you want to get it in that place that you really want to live. And people are really seeking out those bigger spaces, so that's why single-family homes are really in demand. And so are bigger spaces, like one bedrooms and two bedrooms, all of which those rents hit new highs in May, as well.

- All right, Yahoo Finance's Janna Herron, thanks so much for bringing that slightly depressing story about rents hitting that two-year high.