Rental website Zumper has released its first National Rent Report of the year, highlighting some trends it is forecasting for 2020.
Among them: Rent prices will keep rising, although the rate of that increase is going to be slower than in the last couple of years.
Since more people are settling down later in life and valuing a more flexible lifestyle for a longer period of time, Zumper wrote, they are staying renters for longer. Moreover, despite the low mortgage rate environment and healthy consumer sentiment on spending, housing affordability and inventory remain major homeownership constraints, potentially keeping some potential buyers in the renter pool.
That healthy demand can be seen in notable year-over-year jumps in some cities’ rent prices during January. Among Zumper’s top 10 markets, rents stayed fairly flat month over month — typical during slow winter months — but annually, rents sprang upward in cities like New York (where one- and two-bedroom rents were both up around 9%) and Washington, D.C. (which saw one-bedroom rent rise 7.6% and two-bedroom rent shot up 15.2%). More affordable large cities saw rents spike year over year, too, including Buffalo (where both one- and two-bedroom rents jumped over 15%), Milwaukee (one-bedroom rents up 15.5%), and Cleveland (one-bedroom rents up 16.0%, the largest annual increase among the 100 cities tracked by Zumper).
Rents rose significantly in some mid-sized and smaller cities, as well. In Newark, New Jersey, for example, rents soared 15.7% year over year for one-bedroom units and 15.6% for two-bedroom apartments. Similar one-bedroom rent jumps of 15.0% or above were seen in Norfolk, Virginia; Chattanooga, Tennessee; Bakersfield, California; and Lincoln, Nebraska.
San Francisco is still the nation’s most expensive rental market, with one-bedroom rents at $3,500. Zumper expects it to remain in the top spot throughout 2020, with the city bolstered by the flourishing tech scene and hampered by lack of space for new development. San Francisco renters, though, can find a silver lining in the city’s flat year-over-year trend for one-bedroom units; rents for two-bedroom spaces, in fact, fell 3.2% from January 2019.
Not every city saw rent grow from January 2019 to January 2020. One-bedroom prices in Providence, Rhode Island, for example, fell 14.6% yearly, the largest annual decline recorded by Zumper during the month. Other steep rent drops were seen in Baltimore (one-bedroom rents down 12.6%); Houston (one-bedroom rents down 12.0%); and Jacksonville (one-bedroom rents down 10.0%).
On a monthly basis, Des Moines, Iowa, had the fastest growing one-bedroom rent, increasing 4.9% to $860.