SEATTLE–(BUSINESS WIRE)–(NASDAQ: RDFN) — The median monthly asking rent in the U.S. increased 17% year over year to a record high of $1,940 in March, according to a new report from Redfin, the technology-powered real estate brokerage. This was the largest annual jump since at least February 2020.
Meanwhile, the national median monthly mortgage payment for homebuyers rose twice as fast: It climbed 34% year over year to $1,910, also the biggest increase in Redfin’s records.
The increase in monthly mortgage payments is largely because mortgage rates climbed from under 3% to 5% in just the past three months, pushing many potential buyers out of the for-sale market and increasing demand—and prices—for rentals. Even though homebuyer monthly payments are rising rapidly, the typical asking rent was still slightly higher as of March—but the gap is closing quickly and is the smallest on record in Redfin’s rental data.
Although the home purchase market is showing early signs of a cooldown and price growth may slow in the coming months, Redfin economists do not currently expect sale prices or mortgage rates to drop.
“Many potential first-time homebuyers are quickly being priced out of the market by record-high home prices and fast-increasing mortgage rates,” said Redfin Chief Economist Daryl Fairweather. “They are then faced with two options: rent or move somewhere with a lower cost of living. Those who choose to rent may save money in expensive housing markets in the near term, but long term, they may have to deal with continued rent increases, year after year. Those who move and buy somewhere more affordable now will be paying considerably more than if they bought last year, but will be able to build equity in the long run and ensure relatively stable monthly housing costs going forward.”
|
Rental Market Summary |
March 2022 |
Month-Over-Month |
Year-Over-Year |
|
Median Monthly Rent |
$1,940 |
2.1% |
16.7% |
|
Median Monthly Mortgage Payment for Homebuyers w/ 5% Down Payment |
$1,910 |
11.6% |
34.2% |
Mortgage payment increases outpaced asking rent increases in 44 of the 50 largest U.S. metro areas in March.
Asking Rents Are Up 40% In Portland, OR
Rent increases hit 40% year over year in Portland, OR, with Austin, TX not far behind at 38%. The Tri-State Area and many parts of Florida also saw rental increases of 30% or more.
Top 10 Metro Areas With Fastest-Rising Rents Year Over Year
- Portland, OR (+40%)
- Austin, TX (+38%)
- New York, NY (+35%)
- New Brunswick, NJ (+35%)
- Newark, NJ (+35%)
- Nassau County, NY (+35%)
- Fort Lauderdale, FL (+33%)
- Miami, FL (+33%)
- West Palm Beach, FL (+33%)
- Orlando, FL (+30%)
Just two of the 50 most-populous metro areas saw rents fall in March from a year earlier. Rents declined 10% in Milwaukee and 1% in Kansas City, MO.
Metro Areas Where Rents Declined Year Over Year
- Milwaukee, WI (-10%)
- Kansas City, MO (-1.1%)
To read the full report, including charts, additional data and methodology, please visit: https://www.redfin.com/news/redfin-rental-report-march-2022/
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country’s #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we’ve saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.
