Rents for apartments in Oklahoma City, Oklahoma and Austin, Texas have risen more than 100% in the past year, reflecting a broader rise in housing costs. But rent costs are falling in a handful of US cities that are bucking the trend.
Rents were down nearly 12% in April from a year ago for one-bedroom apartments in Baltimore, Maryland and Cleveland, Ohio, according to a new study from Rent.com. During the same period, prices also fell about 11% in Toledo, Ohio; 10% in Kansas City, Missouri and Milwaukee, Wisconsin; and more than 9% in Indianapolis, Indiana.
Other cities where one-bedroom rents have dropped significantly from last year include Las Vegas, Nevada; Virginia Beach, Virginia; Lubbock, Texas; and Norfolk, Virginia, Rent.com found. Prices for two-bedroom units have fallen year over year in Shreveport, Louisiana; Wichita, Kansas; and Scottsdale, AZ.
High rents in those areas are falling as Americans are being called back to office in major metropolitan areas — and that reduces the demand for housing in mid-sized cities, said Brian Carberry, senior managing editor at Rent.com.
“People are leaving these areas and moving back to Chicago, LA, New York, Seattle or wherever they moved from,” he told CBS MoneyWatch.
That same trend explains why rents continue to rise in places like Miami, Atlanta, San Diego and other urban hotspots. In these cities, the available housing stock simply isn’t keeping up with demand, Carberry said. And while construction companies are building new apartment complexes in some areas, most are made up of expensive, luxury units.
Another reason rents are rising in larger cities is that many families who have sold their homes in recent years are entering the rental market as the cost of buying a home and mortgage rates are rising.
“People who have sold their homes find it’s better for them to rent for the long term — rather than buy right away and give that profit back to another home seller,” Carberry said.
Rents began to fall in the major cities during the first months of thepandemic as some people fled to smaller urban areas. With most pandemic restrictions lifted, Americans are returning en masse to larger cities and seeking apartment space, pushing prices up. Rent in Florida and New York.
The median monthly rent for Miami rose to $2,988 in March, according to Realtor.com, putting it on par with California’s notoriously expensive Bay Area and above New York City’s median of $2,750. Average rents in Orlando and Tampa were $1,886 and $2,114, respectively.