Now that we’ve waved goodbye to the rather dramatic 2016, it’s time to have a closer look at how the year’s interesting turn of events impacted the renters across the U.S.
In a recent end of year report, apartment search website RENTCafé shows that in 2016 rent rates fluctuated across the U.S., with prices cooling off in some of the largest cities and increasing drastically in mid- and small-sized markets.
The research, which is based on data collected by Yardi Matrix, indicates that the national average apartment rent in 2016 increased by 4 percent year-over-year, reaching $1,210 per month. Additionally, six cities witnessed a dramatic increase of more than 9 percent in December 2016 over the same month 2015—that’s the equivalent of one extra month of rent that renters living in Sacramento, Calif., Stockton, Calif., Colorado Springs, Colo., Detroit, Mich., Mesa, Ariz., and Long Beach, Calif. had to pay in 2016 as compared to the previous year.
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Sacramento recorded a staggering 12 percent rent increase year-over-year, jumping from a monthly average of $1,063 in December 2015 to $1,193 in December 2016. Based on the December average rent, the total amount of rent paid in 2016 exceeded the amount paid in 2015 by $1,560, or more than an extra month of rent.
Stockton follows closely with a 10.6 percent increase year-over-year, the second largest rent gain in the country. Average monthly rents clock in at $991 and are fast approaching the $1,000 milestone, mainly because there was a lack of new apartments in the city in 2016. Renters here had to dig deep in their pockets last year and pay an extra $1,140 in total rent as compared to 2015.
Prices for apartments for rent in Colorado Springs followed the same trend last year, gaining 10 percent on a year-over-year basis. And with an average rent rate of $1,020/mo at the end of 2016, the total amount of annual rent paid here exceeded the total annual for the previous year by $1,116, which is more than an extra month of rent.
Meanwhile, annual rents in Detroit increased by 9.3 percent, mainly because of the lack of new apartment deliveries in 2016. With rents reaching $932 in December 2016 from $853 in December 2015, Detroit renters paid $948 more than they did in the previous year.
Mesa might be a rather small market, but rents here increased by a surprising 9.1 percent year-over-year, bringing monthly rents up to $864 from $792 in 2015. This means that Mesa renters paid an additional $864 in annual rent as compared to the previous year.
Rent prices in Long Beach increased by 9 percent year-over-year, reaching $1,828 in December 2016 — a $155/mo gain from the same month 2015. This means that rental apartments here cost an extra $1,812/yr in 2016.
Some large cities also saw skyrocketing rents in 2016: Nashville, Tenn. with 7.3 percent, Seattle, Wash. with 7.2 percent, Phoenix, Ariz. with 7.1 percent and Las Vegas, Nev. with 6.7 percent. As for small and mid-sized markets, the shortage of new supply paved the way for significant gains in rent prices in 2016. Riverside, Calif. saw a 7.9 percent increase year-over-year—that’s 2 percent more than the rent gains in nearby Los Angeles—while Arlington, Tex. and Henderson, Nev. followed closely with 7.5 percent and 6.1 percent, respectively.
California is Home to 5 of the Top 10 U.S. Cities with the Highest Rents
The top 10 highest rents in the U.S. in 2016 were recorded on the West and East coasts, which benefit from thriving economies and expanding job markets that attract hoards of young professionals. Much to no one’s surprise, Manhattan still leads the nation with the most expensive average rent of $4,144 per month in 2016. San Francisco follows closely with an average rent of $3,360/mo., not far from Boston’s average monthly rent $3,172 in 2016.
At the other end of the spectrum, the Midwest recorded very modest rent increases in 2016. Indianapolis remains one of the most affordable large cities in the country, with apartments here renting for an average $805 per month. Meanwhile, the lowest average rents in 2016 were recorded in Wichita, Kans., where average monthly rents reached $631. Average rents in Toledo, Ohio and Tulsa, Oklah. are slightly higher, closing in at $650 per month and $672 per month respectively.
Article by Amalia Otet – RentCafe