U.S. Rent Growth Plateaus for Over a Year, Small Cities Rents Climb
Twenty-nine of the top 30 cities with the highest rent increases in March were in small cities, led by Odessa and Midland, Texas, where rent prices are bouncing back after the most recent drop in oil prices.
by Nadia Balint
The average apartment rent in the U.S. grew only by 2.5 percent year-over-year in March, reaching $1,371 per month, according to the just-released March 2018 Apartment Rent Report prepared by RENTCafé, which is based on rent data from Yardi Matrix. Growing just a few percentage points above inflation for over a year now, the last time the national average rent posted a 3 percent growth was in January 2017.
Although the national average rent has been climbing steadily over the last 10 years, annual growth has sizzled down since its late 2015, early 2016 peaks. Demand for rentals remains strong, especially in second and third tier markets that are seeing some renewed economic growth. Twenty-nine of the top 30 cities with the highest rent increases in March were in small cities, led by Odessa and Midland, Texas, where rent prices are bouncing back after the most recent drop in oil prices, with spectacular rent increases of 37 percent and 30 percent, respectively, compared to one year prior.
Also in recovery mode, rent prices in Reno, Nev. have been seeing double-digit increases over the last two years, after posting double-digit drops back in 2012 and 2013. Rents in Reno were up by 10.5 percent in March, reaching an average of $1,141 per month. Also notable in the top 10 is the price of apartments in Tacoma, Wash., which have hit $1,209 in March, up by 8.3 percent over the year. Demand for rental housing is booming in the Pacific Northwest thanks to the area’s strong job market.
Hurting from low supply and regulatory limitations, Sacramento’s heated apartment market is the only mid-sized market in the top 30 for highest rent increases in March, with prices 7.2 percent higher than the same time last year.