August Rents Rose in 89% of Top 252 Cities: Fastest Pace in 18 Months

Apartment construction is down. Rent prices are up. That's the message in 89% of the top 252 US markets.

The RentCafe reports August Rents Rose at the Fastest Pace in 18 Months, as Apartment Construction Slows

Key Points

  • Rents push forward in August, rising by 3.1%, the fastest annual increase in 18 months.
  • The national average rent reached an all-time high of $1,412 in August 2018, up by 3.1 percent ($42) year over year, and by 0.1 percent ($2) month over month.
  • Rents increased in 89 percent of the nations biggest 252 cities in August (including newly added Queens, NY and Honolulu, HI), stayed flat in 10 percent of cities, and dropped in only 1 percent of cities compared to August 2017.
  • Queens (NYC), Las Vegas, and Phoenix rents increased the most in one year, while Baltimore, San Antonio, and Washington, DC rents have changed the least among the nations largest cities.

National Rent Changes

Large City Rent Changes

Top and Bottom Ten

Mega-Hub Rent Prices

The above charts reflect the silliness of computing national average inflation measures such as the CPI. If you live in LA, Chicago, Orlando, Tampa, or Denver, you know first hand the CPI is understated.

So does anyone who buys their own medical insurance.

And the BLS does not factor in rising home prices or asset prices.

The Fed blew multiple bubbles, and they will all pop.

Mike "Mish" Shedlock

Comments (10)
No. 1-8
pi314
pi314

The 2.8% rent increase in Seattle is almost certainly false. I am quoting from the same RentCafe source - "The average rent for an apartment in Seattle is $1,906, a 0% decrease compared to the previous year, when the average rent was $1,906."

According to Apartment List, "In the year ending June 1, 2018, however, Seattle saw its rank fall to #22, with rents decreasing by 0.9 percent. Seattle has seen a record number of new units hit the market over the past couple of years, and it seems that all this new supply has now put a halt to the city’s rent growth."

And the Bloomberg article 4 days ago painted a decidedly different picture -

https://www.bloomberg.com/news/articles/2018-09-07/rental-glut-sends-chill-through-the-hottest-u-s-housing-markets

And if you add in the common incentives given by Seattle landlords, e.g. free parking, free rent, free visa debit card, the rent might have dropped even more than reported.

pi314
pi314

Which of RentCafe or ApartmentList is fake news? I will let your readers decide. Here is the September 2018 National Apartment List Rent Report ("Rent growth is also pacing well behind the overall rate of inflation") -

https://www.apartmentlist.com/rentonomics/national-rent-data/

2banana
2banana

It used to be rents would cash flow an investment in an apartment complex or rental house.

With the insanity of obama cheap and easy money and ZIRP - landlords were investing for sweet appreciation. Cash flow didn't matter.

With the last 2 years of the great QE unwind plus increasing interest rates - either rents are going to have to cover landlord rental costs + profit or rental stock prices need to implode.

jivefive99
jivefive99

But they do do "owners equivalent rent" which is kinda like rent, which has been increasing since 2010 according to your graph, so it's just not increasing fast enough to see, or .... ?

Brother
Brother

Monthly rents and rental property prices use to be priced at rent x12 x 12. Now we have large numbers of speculators, home flippers and home owners inching up prices fast as possible to get a return. Today you won’t break even on a multi-unit property purchase and with an all cash purchase the return on investment is not good.