Average monthly asking rents across the U.S. rose to $1,891 in January, a 15.2% year-over-year increase marking the largest annual gain since February 2020. Meanwhile, prospective home buyers are also seeing a record-breaking increase in the national median monthly mortgage payment, according to Redfin, spelling affordability troubles for both renters and buyers.
Metro areas like Portland, Oregon and Austin, Texas are reporting the largest hikes in rental prices with year-over-year gains of 39% and 35%, respectively, followed by four pricey cities in New York and New Jersey. The rental market will likely see increased demand and even more substantial price gains over the coming months as rising mortgage rates push many would-be buyers out of a volatile for-sale market.
“Moving right now is expensive, whether you’re renting or buying,” said Redfin Chief Economist Daryl Fairweather. “One of the only ways to avoid high housing costs is to move somewhere cheaper, but the list of places that are truly inexpensive is shrinking. Rising mortgage rates are squeezing more Americans out of the for-sale market, which will likely put increasing pressure on rents in the coming months.”
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