rent growth

 

Key takeaways

  • The average annual rent growth since 2012 in the United States is 3.18%.
  • Some cities with the highest rent growths in the country include those from New York, Michigan, and California.
  • Trends to look out for regarding rent growth moving forward include access control implementation, renting over owning, increased multifamily development, and offering more incentives to renters.

 

In recent years, the state of rent growth has rapidly fluctuated, which, in turn, alters the way property managers operate their multifamily property. So, it’s vital you know what to expect from the market and any potential trends moving into next year.

This blog will cover what the rent growth rate is in the United States and what cities saw the highest increases in recent years. Most importantly, you can discover the rent growth trends to expect moving forward.

This post covers:

 

ButterflyMX Access Control CTA

 

What is the rent growth rate in the US?

Since 2012, the average rent increase per year in the US has been 3.18%.

The rent growth rate is often related to inflation, with both affecting one another. However, in recent years, rent has increased faster than inflation, causing renters to lose purchase power. Moreover, since the pandemic, rent has steadily increased, peaking in February of 2022 at 16%.

Of course, rent growth rates vary widely depending on where you are in the country. For instance, some cities have seen rent declines, whereas some saw record increases.

 

Is there a limit on rent increases in the US?

Whether or not there’s a limit on rent increases in the US depends on the state in which you reside.

Currently, there are seven states that have enacted legislation regarding rent caps or increases:

  • California
  • New York
  • New Jersey
  • Maryland
  • Maine
  • Oregon
  • Minnesota

Other states either prohibit or allow cities and counties from implementing their own regulations on rent increases. So, it’s best to research your own state’s regulations.

 

Learn the best methods of budgeting for your property:

 

What is the average rent in the US?

According to RentCafe, the average rent price in the US is $1,702 for an 897-square-foot apartment.

 

What cities have the highest rent increases?

As mentioned above, rent increases differently depending on the area. Some cities may see significant increases, they may plateau, or even decrease depending on the city’s economy.

With that said, it’s important to stay updated on your city’s rent growth as it can impact how you raise rent at your property. After all, property managers must stay updated on the latest economic trends to appropriately attract and retain residents.

So, here are the highest increases in rent growth by city:

 

Rank City Rent increase
1 Amagansett, NY 62.82%
2 Oxford, MS 37.46%
3 Orinda, CA 35.82%
4 St. Pete Beach, FL 30.43%
5 Auburn Hills, MI 29.7%
6 Rocky Mountain, NC 24.62%
7 Haddonfield, NJ 24.23%
8 Roseville, MI 23.2%
9 Englewood, FL 22.87%
10 Liverpool, NY 22.44%

 

This data was collected by the SmartAsset 2023 Study, which encompasses more locations and even cities where rent decreased.

 

4 rent growth trends to look for

As rental rates fluctuate and change, you should know how to manage your property according to the latest trends.

The multifamily rent growth trends you should keep an eye on are:

  1. Access control measures
  2. Multifamily development
  3. Renting vs. owning
  4. Offering more incentives

 

1. Access control measures

As properties implement new amenities, such as an access control system, they can increase their rates by offering more to residents. After all, access control systems provide renters with peace of mind as it increases safety and security. Meanwhile, your property will benefit as you have greater control over who can enter and easily monitor access throughout the year.

The best access control products include the ButterflyMX ecosystem of products, which includes:

  • Video intercoms
  • Keypads
  • Mullion readers
  • Vehicle access control
  • Front desk station
  • Elevator controls

 

ButterflyMX provides the best access control options on the market. Get a quote here.

 

2. Multifamily development

The real estate industry is trying to meet the growing demand for housing, with a particular focus on multifamily developments. With an increase in multifamily construction, problems, such as housing shortages and accommodating urbanization trends, become the focus.

As a result of new residential units, you expect a more competitive landscape when it comes to attracting and retaining residents. The influx in rental prices creates a dynamic where renters may find increased options at varying rates.

 

3. Renting vs. owning

As seen in the last few years, renting continues to be cheaper because of the high-interest rates on mortgages. Thus, single-family rentals will become much more popular as younger generations seek homes to start their family.

Not to mention, the increase in multifamily development will offer affordable and widely available starter home options.

 

4. Offering more incentives

To attract and retain residents in the competitive market, property managers and owners are offering more incentives.

These incentives could include:

  • Temporary reduced rent
  • Waived application fees
  • Waived pet fees
  • Additional amenities

Regardless of the incentives, they create a win-win situation, providing residents with added value while helping you maintain occupancy levels.

 

Navigating Budget Season

Author

Bryson Hile

I love learning about new technologies, especially within the real estate market. I currently reside in Fishers, Indiana.