Average US Rent Hits All Time High Of $1,412; Biggest Increase In 18 Months


With core CPI printing at a frothy 2.4%, and the Fed’s preferred inflation metric, core PCE finally hitting the Fed’s 2.0% bogey for the first time since 2012, inflation watchers are confused why Jerome Powell’s recent Jackson Hole speech was surprisingly dovish even as inflation threatens to ramp higher in a time of protectionism and tariffs threatening to push prices even higher.

But the biggest concern from an inflation “basket” standpoint has little to do with Trump’s trade war, and everything to do with shelter costs, and especially rent, the single biggest contributor to the Fed’s inflation calculation. It’s a concern because according to the latest report from RentCafe and Yardi Matrix,  which compiles data from actual rents charged in the 252 largest US cities, fewer than expected apartment deliveries this year increased competition among existing units, pushing up the national average rent by another 3.1% – the highest monthly increase in 18 months -to $1,412 in August, an all time high. 

The national average monthly rent swelled by $42 since last August and $2 since last month. Above-average numbers of renters renewing leases at the end of the summer and heightened demand from college-age renters also contributed to the rise in rents this time of year.

The rental market is so hot right now – perhaps a continue sign that most Americans remain priced out of purchasing a home – that rents increased in 89% of the nation’s biggest 252 cities in August, stayed flat in 10% of cities, and dropped in only 1% of cities compared to August 2017. Queens (NYC), Las Vegas, and Phoenix rents increased the most in one year, while Baltimore, San Antonio, and Washington, DC rents have changed the least among the nation’s largest cities.

Here are the main highlights for large, mid-size and small markets:

  • Renter Mega-Hubs: The largest increases were in Orlando (7.7%) and Phoenix (6.8%), while Manhattan (1.9%) and Washington, D.C. (2.1%) saw some of the slowest growing rents in this category. The biggest net changes were felt by renters in Los Angeles, which pay $102 more per month this August compared to last year.
  • Large cities: Rents in Queens and Charlotte surge by 8.4% and 5.2% respectively, but barely move in Baltimore (0.2%) and San Antonio (1.5%).
  • Mid-size cities: Mesa (6.9%), Tampa (6.4%), and Sacramento (5.5%) rents increase at the fastest pace. At the other end of the spectrum, rents only ticked up in Virginia Beach (1.4%) and Albuquerque (1.7%).
  • Small cities: Due to limited stock and high demand, Lancaster and Reno rents soared by 9.7% and 11.3% respectively. Apartment prices in Midland (31.9%) and Odessa (30%) are over $300 per month more expensive than in August 2017. Brownsville (-2%) and Baton Rouge (-0.7%) saw rents decrease over the past year.
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