Landlords Raise Rents In Big Cities Due To High Demand

A recent housing boom fueled by an unprecedented surge in home prices has meant Americans are renting more than ever and willing to rent above market value.

Renting has increased 7% nationally year-over-year for one-bedroom apartments and 8.7% for two-bedroom apartments, according to Zumpers National Rent Index.

Big cities are seeing rent demands increase heavily. New York saw a double in demand since 2020 and San Francisco saw a 79% increase in interested rents, while Seattle experienced a 55% increase, according to Rent Cafe.

Rent is also increasing for single-family homes. The increase in May was nearly four times the May 2020 increase, according to data from CoreLogic on rent for single-family houses.

"Rent prices for the low-price tier, increased 4.6% year over year in May 2021, up from 2.7% in May 2020. Meanwhile, high-price rentals increased 7.9% in May 2021, up from a gain of 1.3% in May 2020. This was the fastest increase in low-price rents since January 2017 and the fastest increase in high-price rentals in the history of the SFRI,” said Molly Boesel, principal economist at CoreLogic.

Boesel cited an uneven job recovery for the rent-price increases.

Prices are also rising because landlords are dealing with the continued problems from the pandemic eviction moratorium. Landlords are not able to push out renters who cannot pay, which is leading them to raise the prices of their available rental properties to recover.

President Joe Biden in early August issued a new order to temporarily extending the moratorium for 60 days but renters in big cities have mostly remained employed and paying their rent.

“It’s kind of a good time to be an urban apartment owner again,” Mark Parrell, chief executive of real estate investment trust Equity Residential, told the Washington Post.