With homeownership rates at historically low levels and a lack of affordable housing options in all major metro areas, renting becomes a challenge for renters all across the US, particularly low- and middle-income earners. Rents have been steadily rising for the past year, with the national average for an apartment hitting an all-time high of $1,181 in March 2016, up 5.7% from 2015.
Looking ahead, it becomes pretty clear that it’s not a question of “if” anymore, it’s about how much rents will increase this year. If the Southeast and the Northeast Corridor maintain a fairly normal pace in rent growth, the West is expected to rock the landlords’ world and post record-breaking price increases this year.
In San Francisco’s case it’s all the more dire as apartments here are already outrageously expensive – think $2,400 on average for a studio and $4,800 for a two-bedroom in the city. By year end, the Bay Area is expected to see a 10.5% jump in rent prices. The same goes for LA and Sacramento, where mild winters and lush scenery come at a price – not at all negligible and still on the rise.
Amid historic rent hikes, Portland remains a bargain for San Francisco and Seattle transplants
The biggest surprise comes from Portland, where demographic and employment tailwinds keep demand for rental apartments up there as well. Rents in the city are expected to climb an impressive 8.8% this year, making Portland one of the main contenders for the “hottest metro for rent growth in 2016” title. But when compared to other millennial-magnet, job-centered hubs on the West Coast, Portland is actually much easier on the pocket. Whereas Portland apartments rent for $1,252 on average, both San Francisco and northern neighbor Seattle have higher average rents – $2,810 and $1,555, respectively.
Looking for cheaper rent? March South!
Headed to the Southeast? You’ve hit the jackpot! It’s where the jobs, the nice weather, and the low rents are. Atlanta, Orlando, Jacksonville, Miami, Nashville, as well as Texas’ major urban hotspots – San Antonio, Austin, Dallas, and Houston – are top choices for those in search of a more relaxed housing landscape.
Check out the full list of the hottest markets for projected rent growth in 2016 in the nifty infographic below!