Rental Market Wraps Up 2021 with 5.3 Times Faster Price Growth, Phoenix Metro 7th Fastest

The national median rental price reached $1,781 per month in December, bringing 2021 annual rent growth to an average of 10.1% versus 1.9% in 2020

inbusinessPHX.com

New data shows national rents grew five times faster in 2021 than in 2020, on average, according to the Realtor.com® Monthly Rental Report released today. In December, rents notched the sixth straight month of double-digit yearly increases nationwide and surged in the majority of large metros, led by Miami, Tampa, Fla. and Orlando with gains of more than 34% each.

“On average in 2021, national rents were more than 10% higher than in 2020. As our December report further illustrates, this average understates the wild ride that the rental market, and many renters, experienced in 2021. Rents started the year roughly flat and gained incredible momentum throughout the year, hitting double-digit yearly pace by summer and continuing to surge through December,” said Realtor.com® Chief Economist Danielle Hale. “While yearly growth is still strong, monthly growth cooled in December, which is typical for this time of year and not expected to last. With rents already at a high and expected to keep going up, rental affordability will increasingly challenge many Americans in 2022. For those thinking about making the transition from renting to buying their first home, rising rents will remain a motivating factor even as for-sale home prices and mortgage rates continue to climb.”

2021 Realtor.com® Rental Metrics – National

Unit Size Dec. 2021 Median Rental Price Dec. 2021 Rent Change Over 2020 Average 2021 Rent Change Over 2020 Average 2020 Rent Change Over 2019
Overall $1,781 19.3% 10.1% 1.9%
Studio $1,462 18.6% 6.1% -0.7%
1-bed $1,651 19.3% 10.0% 1.9%
2-bed $2,003 19.1% 11.7% 3.7%

The Streak Continues: U.S. rents hit sixth straight months of double-digit growth
Largely attributed to winter seasonality, the U.S. median rental price posted a smaller monthly gain in December compared to earlier in 2021. However, December rental trends also reflect a shift in demand towards smaller rental units common to major metropolitan centers. For instance, two-bedroom rents posted monthly declines for the first time since November2020 in December, after skyrocketing earlier in 2021 as workplace flexibility enabled some big city renters to explore smaller markets offering more space for their money. Now that more workers are returning to downtown offices, studio rents accelerated at a faster pace than larger unit rents in December and helped overall rents remain at a double-digit percentage point higher than in 2020 for the sixth month in a row.

  • In December, the U.S. median rental price grew 19.3% year-over-year to $1,781, which was relatively flat from last month’s level ($1,780).
  • Larger unit rents posted smaller monthly gains than seen from October to November, but grew by double-digits over December 2020. Among 0-2 bedroom units, the median rental price for one-bedrooms grew at the fastest annual pace, up 19.3% to $1,651.
  • December rental prices for two bedroom units ($2,003) increased 19.1% year-over-year, coming in slightly below the November median ($2,005).
  • The median studio rental price continued to accelerate in December, rising 18.6% over the same month in 2020 to a two-year high of $1,462.

A Major Comeback: National rents closed out 2021 strong, after a slow start
U.S. rental markets took consumers on a wild ride over the course of 2021. Following shallow growth in the first two months of the year, rents began to recover before hitting a double-digit pace in summer which continued through end-of-year. The early gains were led by secondary markets and larger units, driven by the migration of big city renters to smaller rental markets where budgets stretched further. Even as the big city rental recovery began, as reported in September, the 2021 surge in secondary rental market popularity and prices continued, and helped offset slower early-year growth. As a result, the average pace of growth in overall U.S. rents closed out the year at more than five-times faster than in 2020.

  • Nationally, rent growth hit a double-digit pace in 2021, up an average of 10.1% – 5.3 times higher than the 2020 rate (+1.9%) and above the Realtor.com® Forecast for 2022 (+7.1%).
  • With demand for space rising during COVID, larger unit rents posted the biggest annual gains among unit sizes in 2021, each rising at a double-digit pace. Over the past 12 months, average year-over-year rent growth for two-bedroom and one-bedroom units was 11.7% (+$196) and 10.0% (+$139), respectively.
  • Common to big cities that saw an exodus of renters earlier in the pandemic, studio rents declined at the beginning of 2021. However, studio rents began to recover in the second half of the year as downtown offices and attractions began to reopen, and ended 2021 at an average annual growth rate of 6.1% (+$76).

2021’s Cinderella Story: Remote work drives skyrocketing rents in secondary markets
The real “Cinderella story” of the 2021 rental market was among smaller secondary metros. The year’s fastest-growing rental markets were all outside of big tech cities, with the top 10 led by the relatively affordable Los Angeles alternative of Riverside, Calif. Rental popularity in these secondary metros was driven by a number of COVID-related trends in consumer preferences, including the need for more space and easier access to the outdoors. As a result, 2021 annual rent growth across the top 10, on average, was two times faster than the national rate.

  • In 2021, rents increased by an average of 20.7% in the top 10 markets, led by Riverside (+28.5%), Tampa (+25.6%), Memphis (+23.0%), Miami (+22.1%) and Sacramento (+19.5%). Additionally, December data shows many of these markets remained among the fastest-growing metro areas through end-of-year.
  • A key trend driving rental demand and price growth in these areas is rising workplace flexibility. In half of 2021’s fastest-growing rental markets, LinkedIn data shows the share of job seekers applying for remote work roles is higher than national average (25.2%)1, led by Tampa (29.6%).
  • Comparatively, big tech cities dominated the 2021 list of slowest-growing rental markets, with average rent growth across these 10 metros ending the year at just 2.0%. However, 2021 data shows big city rents recovered significantly from sharp drops earlier in the year, with average rents declining in just two of the bottom 10. (see table below)

Hale added, “Regardless of where you live, renting is generally more expensive now than in prior years. However, expected income growth could give renters more negotiating power – especially if you continue to have workplace flexibility. Those able to work big city jobs while living in secondary metros are still likely to find more affordable rental options than in the biggest tech cities. Take the example of Tampa – despite being one of the fastest-growing rental markets in 2021, the December median rental price ($2,038) remained significantly lower than in a big northeastern city like New York ($2,670).”

Whether renters are interested in making a move to a new rental unit in their area or in another state, they can use the Realtor.com® Rentals App to fine-tune their search and set up alerts about new rental listings that match their criteria. For renters interested in making the transition to buying their first home, the Realtor.com® Rent vs. Buy Calculator provides helpful tools for helping them to assess the many financial factors and make the right decision for their families and budgets.

2021 Realtor.com® Rental Metrics – Metros with the Fastest and Slowest Rent Growth

Fastest Growth Slowest Growth
Rank Metro Average 2021 Rent Change Over 2020 Rank Metro Average 2021 Rent Change Over 2020
1 Riverside, Calif. 28.5% 1 San Francisco, Calif. -2.5%
2 Tampa, Fla. 25.6% 2 San Jose, Calif. -0.3%
3 Memphis, Tenn. 23.0% 3 Chicago, Ill. 0.4%
4 Miami, Fla. 22.1% 4 Boston, Mass. 0.7%
5 Sacramento, Calif. 19.5% 5 New York, N.Y. 1.4%
6 Las Vegas, Nev. 18.9% 6 Minneapolis, Minn. 2.4%
7 Phoenix, Ariz. 18.8% 7 Washington, D.C. 3.0%
8 San Diego, Calif. 17.5% 8 Milwaukee, Wis. 4.7%
9 Jacksonville, Fla. 17.2% 9 Philadelphia, Pa. 4.8%
10 Orlando, Fla. 16.3% 10 Seattle, Wash. 5.2%

Dec. 2021 Realtor.com® Rental Metrics – 50 Largest U.S. Metro Areas

Metropolitan Statistical Area Overall Median Rent Overall Rent

Y/Y

Studio Median Rent Studio Rent Y/Y 1-br Median Rent 1-br Rent Y/Y 2-br Median Rent 2-br Rent Y/Y
Atlanta-Sandy Springs-Roswell, Ga. $1,808 21.8% $1,611 18.9% $1,689 23.7% $2,010 21.4%
Austin-Round Rock, Texas $1,717 28.7% $1,443 30.6% $1,568 29.2% $1,916 29.0%
Baltimore-Columbia-Towson, Md. $1,769 13.6% $1,595 24.4% $1,706 14.0% $1,873 13.0%
Birmingham-Hoover, Ala. $1,249 22.2% $1,083 7.2% $1,191 22.1% $1,313 24.2%
Boston-Cambridge-Newton, Mass.-N.H. $2,726 18.5% $2,470 28.6% $2,535 18.6% $3,000 15.3%
Buffalo-Cheektowaga-Niagara Falls, N.Y. $1,435 20.1% $1,098 38.6% $1,295 21.0% $1,615 19.6%
Charlotte-Concord-Gastonia, N.C.-S.C. $1,598 21.3% $1,456 23.2% $1,475 20.4% $1,755 17.9%
Chicago-Naperville-Elgin, Ill.-Ind.-Wis. $1,800 11.6% $1,360 8.5% $1,798 15.3% $2,000 5.5%
Cincinnati, Ohio-Ky.-Ind. $1,400 15.9% $1,175 17.5% $1,346 17.8% $1,562 17.8%
Cleveland-Elyria, Ohio $1,352 16.9% $1,000 26.7% $1,319 19.9% $1,450 13.9%
Columbus, Ohio $1,247 14.1% $1,008 12.1% $1,150 15.1% $1,385 15.6%
Dallas-Fort Worth-Arlington, Texas $1,590 23.4% $1,353 25.8% $1,456 24.9% $1,893 24.7%
Denver-Aurora-Lakewood, Colo. $1,901 17.9% $1,598 18.3% $1,781 19.0% $2,192 18.2%
Detroit-Warren-Dearborn, Mich. $1,400 12.1% $1,150 15.1% $1,240 18.2% $1,529 11.7%
Hartford-West Hartford-East Hartford, Conn. $1,729 15.5% $1,328 13.0% $1,611 13.3% $2,025 13.0%
Houston-The Woodlands-Sugar Land, Texas $1,389 15.9% $1,312 19.5% $1,263 17.3% $1,570 17.0%
Indianapolis-Carmel-Anderson, Ind. $1,226 12.0% $1,023 6.0% $1,117 8.8% $1,356 12.9%
Jacksonville, Fla. $1,583 29.0% $1,380 29.9% $1,476 30.3% $1,728 31.2%
Kansas City, Mo.-Kan. $1,225 11.2% $989 10.5% $1,100 10.5% $1,455 12.4%
Las Vegas-Henderson-Paradise, Nev. $1,631 29.8% $1,126 32.4% $1,505 30.3% $1,769 29.4%
Los Angeles-Long Beach-Anaheim, Calif. $2,952 18.1% $2,252 18.5% $2,707 19.9% $3,467 18.4%
Louisville/Jefferson County, Ky.-Ind. $1,181 16.2% $938 3.8% $1,074 12.1% $1,322 16.7%
Memphis, Tenn.-Miss.-Ark. $1,324 29.4% $1,173 19.6% $1,317 33.0% $1,371 28.3%
Miami-Fort Lauderdale-West Palm Beach, Fla. $2,850 49.8% $2,300 44.4% $2,507 47.1% $3,234 44.1%
Milwaukee-Waukesha-West Allis, Wis. $1,527 11.0% $1,195 9.1% $1,403 8.0% $1,758 11.6%
Minneapolis-St. Paul-Bloomington, Minn.-Wis. $1,535 6.7% $1,238 6.8% $1,448 5.7% $1,870 10.3%
Nashville-Davidson–Murfreesboro–Franklin, Tenn, $1,693 23.6% $1,676 23.5% $1,600 24.1% $1,815 25.1%
New Orleans-Metairie, La. $1,774 18.3% $995 -16.8% $1,595 13.9% $2,125 25.0%
New York-Newark-Jersey City, N.Y.-N.J.-Pa. $2,670 6.8% $2,275 11.9% $2,443 3.1% $2,980 3.2%
Oklahoma City, Okla. $949 15.7% $785 5.4% $896 20.6% $1,008 13.6%
Orlando-Kissimmee-Sanford, Fla. $1,807 34.1% $1,602 28.5% $1,675 34.9% $2,048 41.4%
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md. $1,787 11.9% $1,427 13.0% $1,703 10.7% $2,000 11.1%
Phoenix-Mesa-Scottsdale, Ariz. $1,800 26.7% $1,435 38.3% $1,598 28.6% $2,095 27.9%
Pittsburgh, Pa. $1,500 18.5% $1,275 31.4% $1,458 22.5% $1,613 13.4%
Portland-Vancouver-Hillsboro, Ore.-Wash. $1,759 16.8% $1,424 13.7% $1,705 17.0% $1,985 17.0%
Providence-Warwick,R.I.-Mass. $2,000 15.9% $1,650 3.8% $1,755 11.4% $2,263 19.0%
Raleigh, N.C. $1,532 23.6% $1,393 22.5% $1,417 25.1% $1,682 23.1%
Richmond, Va. $1,419 18.2% $1,153 17.2% $1,316 22.3% $1,558 19.3%
Riverside-San Bernardino-Ontario, Calif. $2,550 27.2% $1,583 18.9% $2,150 23.4% $2,832 23.4%
Rochester, N.Y. $1,333 11.1% $945 5.0% $1,200 8.1% $1,495 10.9%
Sacramento–Roseville–Arden-Arcade, Calif. $2,103 21.6% $1,945 20.4% $1,973 21.4% $2,239 21.0%
San Antonio-New Braunfels, Texas $1,306 19.4% $1,153 17.9% $1,204 20.5% $1,502 22.1%
San Diego-Carlsbad, Calif. $2,970 29.3% $2,326 21.2% $2,718 29.4% $3,350 27.8%
San Francisco-Oakland-Hayward, Calif. $2,956 11.1% $2,433 19.1% $2,760 12.8% $3,490 10.7%
San Jose-Sunnyvale-Santa Clara, Calif. $2,998 13.6% $2,463 23.9% $2,771 15.9% $3,410 15.0%
Seattle-Tacoma-Bellevue, Wash. $2,110 21.9% $1,728 26.7% $2,069 22.5% $2,563 25.1%
St. Louis, Mo.-Ill. $1,262 9.7% $975 1.3% $1,200 9.1% $1,388 11.0%
Tampa-St. Petersburg-Clearwater, Fla. $2,038 35.9% $1,885 32.9% $1,840 37.3% $2,261 37.0%
Virginia Beach-Norfolk-Newport News, Va.-N.C. $1,503 18.1% $1,207 9.1% $1,428 14.8% $1,608 17.8%
Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va. $2,102 13.6% $1,724 14.6% $2,009 12.7% $2,448 12.7%

Methodology
Rental data as of December 2021 for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. We use communities that reliably report data each month within the top 50 largest metropolitan areas. National rents were calculated by averaging the medians of the 50 largest metropolitan areas.

Note: Realtor.com® rental data history begins March 2019. As a result, the average year-over-year growth in 2020 is estimated based on rent data between March 2020 and December 2020.

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