Average Rent Increased 17% Year-Over-Year in February

By Alice Seeley

In February, monthly rent reached a record high. The average apartment is now $283 more expensive per month than two years ago. The national average rent was $1,792 last month, a 17% increase from a year ago.

February marked the seventh-straight month of rent increasing by double-digit percentages. This increase is due to an increase in demand, mostly from young renters, many of whom cannot afford to buy a house, according to the report.

The typical American renter spent 29.7% of their income on rent compared to 24.8% in February 2021.

“The general rule of thumb is to keep monthly housing costs to less than 30% of your income,” Chief Economist at Realtor.com, Danielle Hale, said. “And with rents surging nationwide, February data indicates that many renters’ budgets may be stretched beyond the affordability limit.”

Hale predicted that rental prices will remain high but “expect some cooling from the recent accelerated pace.”

The cities dealing with the largest rent increases are Mimi, San Diego, Phoenix, and Austin. Rent in these cities has increased by at least 23%. In Cleveland, Minneapolis, and Detroit, rent only increased by 6%. Currently, San Jose, California, is the most expensive U.S. city to rent in with an average monthly rent of $3,024, followed by San Diego, Los Angeles, San Francisco, Miami, and New York. Omaha, Nebraska, is the cheapest city to rent, with an average monthly rent of $983.

According to data from the report, buying a house is more affordable than renting one in Miami. However, house prices and mortgage rates in Miami are increasing as well, with house prices up 31.6% in February from a year ago.

According to Hale, most renters would prefer to buy “in an effort to lock in a largely fixed monthly payment as a hedge against further inflation, but fast-rising mortgage rates and still-limited numbers of homes for sale could mean some would-be buyers may stick with the flexibility of renting. With rental demand already outmatching supply, rental affordability will remain a challenge.”