Realtor .com August Rental Report: Affordability Continues to Worsen

Realtor .com August Rental Report: Affordability Continues to Worsen

Realtor .com August Rental Report: Affordability Continues to Worsen

Realtor .com August Rental Report: Affordability Continues to Worsen

Realtor .com August Rental Report: Affordability Continues to Worsen

Realtor .com August Rental Report: Affordability Continues to Worsen

Realtor .com August Rental Report: Affordability Continues to Worsen

Realtor .com August Rental Report: Affordability Continues to Worsen

Realtor .com August Rental Report: Affordability Continues to Worsen

​​​​​​​John Reilly
September 23, 2022
5 min

August Highlights

  • August 2022 marks the first month in the past 13 months where rent growth has slowed to a single-digit rate for 0-2 bedroom properties (9.8% Y/Y).
  • The median asking rent in the 50 largest metros declined to $1,771, cooling from last month’s peak. 
  • Miami’s leading position in the year-over-year growth rate was surpassed by Chicago, IL (24.9% Y/Y), Boston, MA (22.8% Y/Y), and New York, NY (18.9% Y/Y), for the first time in the past ten months.
  • Studios continued to catch up with double-digit rent increases whereas 1-bedroom and 2-bedroom units experienced single-digit growth. Rent by size: Studio: $1,489, up 11.8% ($158) year-over-year; 1-bed: $1,653, up 9.3% ($141); 2-bed: $1,964, up 9.1% ($163).

Affordability

  • In August 2022, rent was less affordable than the previous year. Renters earning the typical household income devoted 26.4% of their income to lease a typical for-rent home (vs. 25.7% in August 2021). 
  • 9 of the top 50 metros had a rent share higher than 30% relative to the median household income. Miami, FL, was the least affordable rental market in August 2022. The median rent for a typical 0-2 bedroom unit in Miami, FL, is 1.5 times as high as the estimated maximum affordable rent for the median household.
  • Oklahoma City, OK, is the most affordable rental market in August 2022. The median rent for a typical 0-2 bedroom unit was 42% lower than its estimated maximum affordable rent.
  • With a resurgence in urban rents, rental affordability deteriorated most in the northeast metros such as Boston, MA and New York, NY over the past 12 months.

Rent Dips and Year-over-Year Growth Continues to Slide

In August 2022, the U.S. rental market experienced its first single-digit growth over the past 13 months. The median rent growth across the top 50 metros slowed to 9.8% year-over-year for 0-2 bedroom properties but is still three times as fast as the growth rate seen just before the pandemic hit in March 2020. The median asking rent was $1,771, down by $10 from last month. It is the first time we have seen rents decline since last November, perhaps a sign that more typical seasonal cooling is returning to the rental market, like we’ve seen in recent for-sale data. Despite these encouraging indicators for renters, real affordability challenges persist, and inflation (8.3%) continues to outpace annual wage growth(5.2%), evaporating real gains employees might see from an otherwise strong labor market.

Source Realtor.com

John Reilly

John, a real estate educator and attorney, is one of the foremost writers of real estate materials, which include 10 books, and numerous articles. His national best seller, “The Language of Real Estate” is in its eighth edition, selling over 150,000 copies and published by Dearborn Publishing.

Contact: John@RealTown.com
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