Median rent of $2,258, according to recent report
By Dolores Quintana
The ongoing pandemic has exacerbated the issues of housing affordability everywhere in the United States with some metropolitan areas experiencing a 20% increase in rental costs. According to a report from Stessa.com, a digital platform for property investors to manage, monitor, and communicate the performance of real estate assets, that identifies what cities in the United States where rents have increased the most.
Inflation has made everything more expensive, but the issue with housing is not only the demand for units but also the scarcity of rental properties which allows landlords to charge a premium on available units and houses with a national vacancy rate of 5.6%. It is estimated that the United States has a shortage of almost 4 million rental units. Zoning and density ordinance restrictions have only made it harder to build new affordable housing properties. Since 2009, a whopping 70% of the growth in the rental market has come from high-wage earners who normally should have been homebuyers. This has the effect of causing the market to shift towards the construction of luxury apartments rather than more affordable units.
With home values rising as they are combined with higher interest rates, that means that those same high earners are going to continue to stay in the retail market since it’s harder to buy a home. Moreover, other features of the pandemic are contributing to the problem as well. Supply chain issues make it more difficult for developers to build and the labor market has tightened to the point where some developers can’t find the workers to build the projects that they have.
From February 2021 to February 2022, there has been a 17% surge year to year of rental prices according to Zillow data. In the previous decade, those same prices were stable and usually only rose between 3% to 5% annually.
In fact, there is no area of the rental market that has not been affected by this trend. All types of rental properties have experienced these surging costs. The median cost of all types of rental properties increased up to 10% between 2019 and 2022, according to data from the US Department of Housing and Urban Development.
Of course, different geographical areas were affected differently. Alaska is one of the few areas that actually experienced a decrease in rental costs (3%). But most of the Western United States has had the largest rental increases in the entire United States as well as the largest amount of growth in population.
Stessa analyzed data from the US Department of Housing and Urban Development and the US Census Bureau to chart the changes in median rental prices from 2019 to 2022. Their analysis found that the Los Angeles metropolitan area has a median rent of $2,258 compared to the median rent in 2019 which was $1,948, which is an increase of 15.9%. This is the report’s summary of data from the Los Angeles-Long Beach-Anaheim metro.
- Percentage change in median rent (2019-2022): +15.9%
- Total change in median rent (2019-2022): +$310
- Median rent (2022): $2,258
- Median rent (2019): $1,948
In comparison, here are the same stats for the rest of the United States:
- Percentage change in median rent (2019-2022): +12.5%
- Total change in median rent (2019-2022): +$161
- Median rent (2022): $1,445
- Median rent (2019): $1,284
You can view the entire report here: Stessa.com report: cities where rents have risen most.