Research shows that average rents in US largest cities have increased 20% since last year.
A recent Zumper study found that rents have increased an average 20% in 50 of America’s largest cities over the last 12 months. Another recent study, by Realtor.com, appeared to confirm those numbers – median rents on apartments with two or fewer bedrooms spiked 19.3% from December 2020 to 2021.
A number of American cities even exceeded that rate, with rents in Miami reportedly skyrocketing by 49.8% since last year, according to Realtor.com’s figures. Meanwhile, Zumper’s analysis shows that Boston nearly overtook historically-pricey San Francisco to become the country’s second most expensive rental market, with average prices rising 27%, while the Californian city itself barely budged north of 6.3%. New York City is however the priciest, with rents increasing by 22.8% each year.
Analysts believe the increase is due to many factors. From adults who moved in with parents after the pandemic to young people being denied the opportunity to purchase a home, to rising housing costs.
Labor Department statistics show that there was a smaller 0.5% rise in rents between December-January. This is the biggest increase the department has seen in more than two decades and the trend will continue.
Some economists are concerned because soaring rents contribute to the US consumer price index, which is used to calculate inflation – a marker which jumped 7.5% since January 2021, the largest yearly gain in 40 years.
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The landlords may feel obliged to increase the rent, as the dollar is less valuable. This will cause the inflation and consumer price index to rise even higher.
The Federal Reserve recently announced it plans to raise interest rates multiple times this year in order to prevent further runaway inflation, after repeatedly previously describing rising prices as a “Transitory” situation. The effect of the policy change is unlikely to have an immediate impact on ordinary Americans until months.
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