Have We Passed Peak Rent Prices? For Now, New Study Says
Paying too much for rent is something many of us take for granted as an awful but necessary indignity of modern life, like uncomfortable airplane seats or receiving work emails in bed. But rents in some of the highest-priced American cities may—mercifully—be falling.
At $3,200, the median asking rent for a two-bedroom apartment in New York City has fallen a substantial 19.6% since its peak of nearly $4,000 in March 2016, according to report by rental website Zumper. One-bedroom rents, now averaging $2,850, have fallen 15.4% in that time.
A San Francisco two-bedroom still costs an obscene $4,560 per month — but that’s down 8.8% from October 2015, when it touched $5,000 (1BR rents are down 7.6% to $3,390). And median one-bedroom rents in Oakland and Chicago, while still among the highest in the nation, are off their peaks by 16.5% (to $2,020) and 26.3% (to $1,510), respectively.
In Chicago, at least, the rent drops can be chalked up to a slow decline in population and an increase in new rental units over the past few years — the expansion of housing supply so many affordable housing advocates have been clamoring for. In New York and San Francisco, it may have more to do with the very limits of space-time: When a middling two-bedroom apartment rents for $5,000 a month, there’s almost nowhere to go but down — or out of town.
Rents are still rising in Los Angeles, Washington, D.C., and San Diego, but many of the most expensive rental cities in America appear to be past their peaks — at least for now. Median rents in San Jose, Calif., Boston, Miami, and Honolulu were all down from their 2015 and 2016 peaks in Zumper’s analysis (which looked at asking rents in multi-unit apartment buildings, but not single family homes or individual condos).
That’s great news for renters—in those big, high-priced cities, anyway. But rents are still up nationally by 3.2% compared to August 2016, and they’re rising quickly in more affordable cities.
Year-over-year rent increases for both one- and two-bedroom apartments are up by double digits in Dallas (11.5% for a 1BR, 13.9% for a 2BR), Sacramento, Calif. (15.3% / 15.2%), Houston (15.6% / 14.2%), and Salt Lake City (15.6% / 15.8%), among other places.
Still, try telling someone in San Francisco — where even those earning six figures may spend upwards of 96% of their income on basic necessities such as housing, food, and transportation — that the average rent for a two-bed in Salt Lake City “jumped” 15%… to $1,170 a month. I expect you’ll be met with the same enthusiasm as a cramped middle seat or a late-night work email.