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The cost of housing in the United States escalated sharply in January, with average asking rents rising 15.2% year-over-year to $1,891. This represents the most significant annual jump since at least February 2020. According to data from Redfin, this rental surge outpaced the already substantial increase in the national median monthly mortgage payment for homebuyers, which climbed 25% to $1,595. The data indicates a nationwide trend where moving, whether renting or buying, has become significantly more expensive, shrinking the list of truly affordable locations.
The rapid increase in rents is primarily driven by a fundamental economic principle: high demand meeting limited supply. As rising mortgage rates and high home prices squeeze more potential buyers out of the for-sale market, demand for rental units intensifies. This is compounded by strong job growth in certain metropolitan areas, attracting new residents who need a place to live. Based on our experience assessment, this pressure on the rental market is likely to continue in the coming months as affordability in the for-sale market remains a challenge for many Americans.
The most dramatic rent increases were highly concentrated in specific regions, particularly the Northeast and Florida. However, two standout markets in the West and South led the nation with increases exceeding 30%.
The table below outlines the top 10 metro areas with the fastest-rising rents as of January 2022:
| Metro Area | Year-Over-Year Rent Increase |
|---|---|
| Portland, OR | +39% |
| Austin, TX | +35% |
| Newark, NJ | +33% |
| Nassau County, NY | +33% |
| New York, NY | +33% |
| New Brunswick, NJ | +33% |
| Tampa, FL | +31% |
| Fort Lauderdale, FL | +31% |
| West Palm Beach, FL | +31% |
| Miami, FL | +31% |
While most major markets experienced increases, a handful saw rents fall. This demonstrates that real estate is inherently local, and national trends do not tell the whole story. In January, only two of the top 50 metro areas recorded a year-over-year decrease in asking rents. Rents declined by 4% in both Kansas City, MO, and Milwaukee, WI. These areas may present relative affordability opportunities for renters willing to relocate.
A critical consideration for anyone deciding whether to rent or buy is the relative cost. In January, the year-over-year increase in rents (15.2%) was lower than the increase in the median mortgage payment (25%). However, this comparison varies significantly by location. The rent increase actually outpaced the mortgage-payment increase for new homebuyers in just 13 of the 50 largest U.S. metro areas. This nuanced data is essential for making a informed financial decision based on your specific city.
For renters, the key is to research extensively. While the national trend is upward, exploring less-hyped neighborhoods within a desired city or considering nearby suburbs can sometimes yield better value. For those considering buying, it's crucial to get pre-approved for a mortgage to understand your true budget in the face of rising rates. Ultimately, the decision to rent or buy is highly personal and depends on financial readiness, lifestyle preferences, and long-term plans, especially in a volatile market.
