The Commercial Real Estate Alpha Site

Key takeaways:

• The national average rent reached the all-time high of $1,405 in June 2018, having increased by 2.9 percent year over year, and by 0.9 percent ($12) month over month, according to Yardi Matrix data.
• Rents increased in 88 percent of the nation’s biggest 250 cities in June, remained unchanged in 10 percent of cities, and dropped in 2 percent of them compared to June 2017.
• The top 20 fastest increases in the country were registered in small cities, where population migration and the strengthening economy are accelerating rent growth.
• Manhattan has had the largest year-over-year rent increase of the past 12 months, June having brought a 1.5% increase after a year-long period of decreasing or stagnating prices.

Comparable growth across unit types – Small apartments rev up in June

With renting gaining popularity among families, two- and three-bedroom units were the main drivers of rent growth so far in 2018. June’s increases, however, were almost perfectly balanced among unit types as the demand for studio and one-bedroom units caught up and even outpaced the two-bedroom segment. Three-bedroom homes cost 0.8% more compared to a month prior, $1,714. Two-bed units have seen a somewhat bigger month-over-month increase (although they lagged behind the other categories in yearly comparison), 0.9% to $1,489. Meanwhile, one-bedroom apartments and studios have seen their rents rise by a full percent, to $1,271 and $1,239, respectively.

For rents broken down by unit type in the 250 largest U.S. cities, check out our interactive table at the end of the report.

Denver        $1,597  $1,530   4.4%  $67

Tampa         $1,278  $1,203   6.2%  $75

Los Angeles$2,368  $2,277   4.0%  $91

Orlando       $1,387  $1,280   8.4%  $107

June brings 2.9% upswing of the national average rent, crossing the $1,400 threshold

The average rent at national level has reached an all-time high of $1,405 in June. Compared to last June’s average, this translates into a 2.9% increase – in other words, renters pay on average $40 more per month than they did a year ago. Month-over-month, national rents grew on average by 0.9%, or $12, since May – a significant growth compared to previous months.

None of the rental mega-markets of the country escaped steep rent increases this month. 

Orlando took 1st place by proportional increase as well as dollar-value, where renters now pay 8.4% or $107 more compared to last June. Tampa, Phoenix and Las Vegas apartments also cost 6-7% more than a year ago. Las Vegas has also reached the $1,000 milestone since last year, same as Jacksonville and San Antonio. Renters in Manhattan were also in for an unpleasant surprise after a long period of decreasing rents, followed by a couple of months of stagnation or very sluggish growth. The average Manhattan apartment now commands $4,116, an increase of 1.5% or $60 – the biggest growth in the past 12 months.