Apartment rents in Oklahoma City, Oklahoma, and Austin, Texas, over the past year have soared more than 100%, reflecting a broader rise in housing costs. However, in a handful of US cities that buck the trend, rental costs are actually falling.
According to a new study from Rent.com, through April, rents had fallen nearly 12% from a year earlier for one-bedroom units in Baltimore, Maryland and Cleveland, Ohio. During that same period, prices also fell 11% in Toledo, Ohio; 10% in Kansas City, Missouri and Milwaukee, Wisconsin; and more than 9% in Indianapolis, Indiana.
Other cities where one-bedroom apartment rents have fallen significantly since last year include Las Vegas, Nevada; Virginia Beach, Virginia; Lubbock, Texas; and Norfolk, Virginia, found Rent.com. Prices for two-bedroom units have fallen year over year in Shreveport, Louisiana; Wichita, Kansas; and Scottsdale, Arizona.
Top rents in those areas are falling as Americans are called to the office in major metropolitan areas, and that’s reducing demand for homes in midsize cities, said Brian Carberry, senior managing editor at Rent.com.
“People are moving out of these areas and back to Chicago, Los Angeles, New York, Seattle or wherever they’ve moved,” he told CBS MoneyWatch.
That same trend helps explain why rents continue to skyrocket in places like Miami, Atlanta, San Diego and other urban hotspots. In these cities, the available housing stock is simply not keeping up with the demand, Carberry said. And while construction companies are building new apartment complexes in some areas, most consist of high-priced, luxury units.
Another reason rents are rising in larger cities is that many families who sold their homes in recent years are joining the rental market as the cost of buying a place and mortgage rates rise.
“People who have sold their home are finding that it’s better for them, in the long run, to rent, rather than buy right away and pay that profit back to another home seller,” Carberry said.
Rents began to fall in the big cities during the first months of thepandemic when some people fled to smaller metropolitan areas. Now that most pandemic restrictions have been lifted, Americans are flocking back to bigger cities and looking for apartment space, driving up prices. Rent in Florida and New York.
The median monthly rent in Miami rose to $2,988 in March, according to Realtor.com, putting it on par with California’s notoriously expensive Bay Area and above the $2,750 average in New York City. Median rents in Orlando and Tampa were $1,886 and $2,114, respectively.