State of the Union Follow-Up: What About Rising Rents?
President Biden delivered his first State of the Union address on March 1st in the wake of rising inflation, the aftermath of a costly COVID-19 pandemic, and an intensifying conflict between Russia and Ukraine in Eastern Europe. One issue of importance not largely addressed in Biden’s speech, however, was the cost of housing, which is surging in nearly every metro across the United States.
The overall median rent rose to $1,789 per month nationwide in January, a 19.8% year-over-year increase and the eighth consecutive month of double digit yearly gains, Realtor.com reports. Rental appreciation across every size of rental unit exceeded home-price growth of a two-bedroom home, making home purchases more affordable than renting in many markets.
Overall, most markets where buying was most affordable were “secondary” cities—locations with smaller populations, mostly across the South and Midwest. Other cities where buying was vastly more affordable than renting included Cleveland, Pittsburgh, St. Louis and Detroit.
At the other end of the spectrum, renters are the ones saving money in “Big Tech” cities. Austin, Texas, earned the dubious distinction in Realtor.com’s analysis of being the city where renting was the cheapest compared with buying property. Purchasing a home translated to a 76% higher monthly cost than renting there. Other cities where this was true included New York, San Francisco, San Jose and Seattle.