May Rental Report: Rent Continues to Surge Nationwide, but Growth Starts to Slow
May Highlights
- Median rent in the top 50 metros reached $1,849–15.5% higher than at this time last year and a new rent record for the 15th month in a row.
- Year-over-year rent growth has decreased every month in 2022, and is at its lowest level since September 2021.
- Studio unit rent growth, after trailing larger unit rent growth until January of this year, continues to lead the charge in increasing prices at the national level.
- In some metropolitan areas with healthy local economies, renting a home is relatively more appealing than buying one, compared to other metros.
- Metros with higher rental vacancy rates are generally among the least expensive metros to rent a home in.
Nationwide Rents Spike, but Slow From Record Pace
The median rent for 0- to 2-bedroom rental homes across the 50 largest metropolitan areas in the United States reached $1,849 in May. This is the highest level in Realtor.com® rental data history, and the 15th consecutive month of a new record rent. May’s median rent constitutes a 15.5% increase over May 2021, a 23.2% increase over May 2020, and a 26.6% increase over May 2019. Though these numbers are staggering, they actually mark a slowdown in year-over-year growth compared with the past few months. May 2022 saw the slowest annual growth rate for rents since September 2021, and the annual growth rate has slowed each month of this calendar year after peaking at 17.3% in January.
Figure 1: Year-over-Year Rent Trend
The news is bittersweet for renters. Average earnings for the first quarter of 2022 grew by just 5.2% from the previous year, so the cost of housing outpaced earnings almost three times over, just as the general cost of living as measured by the Consumer Price Index grew by 8.6% in May. Renters are paying more for housing, more for goods and services, and their paychecks are simply not keeping up. However, there may be a slight reprieve coming from the rapid pace of rent growth that characterized the fourth quarter of 2021 and first quarter of 2022. Last month we found that if rent growth remained near 17%, nationwide median rent would surpass $2,000 this summer. This month’s data, which shows a more notable deceleration than we saw in rents earlier this year, suggests that milestone could be further off. If rents continue to grow at May’s annual pace, we’ll see $2,000 rent by October, but if yearly growth continues to slow as it did between April and May, renters may not have to contend with $2,000 rent until next year. If year-over-year rent growth continues to cool down, rent can level off–as it often does in the fall–and continued earnings increases can inch renters’ financial situations back closer to their pre-pandemic states. Further aiding this recovery is the current increase in for-sale listing inventory, which could help some renters become first-time homebuyers and take some pressure off of rental demand.
Studio Units Continue to Drive Rent Growth and Rent Growth Slowdown
In each month of 2022 thus far, 0-bedroom units (studio apartments) have had higher year-over-year growth than 1- or 2-bedroom units and rentals in general. The surge in studio rents is a more recent development, as the 2-year growth remains slower than larger units because studio rents were trailing the rental market at large from May 2019 into May 2020. This interesting reversal will be even more pronounced later through the rest of the year, since studio rents were actually falling through the second half of 2020 in the midst of the pandemic-induced flight from major cities. Studio units experience more volatility in their median rent because their demand is more elastic than larger units. Studio renters are generally more able to move in and out quickly and to search for better prices than renters of larger units who are more likely to be in longer leases and have families that prefer to stay in place. However, as we see rent growth in general slowing down this month, studio rents had the largest month-over-month decrease in growth from April into May, possibly hinting at a broader leveling-off of median national rent.
Table 1: National Rents by Unit Size
| Unit Size | Median Rent | Rent YoY | Rent Change – 2 years |
| Overall | $1,849 | 15.5% | 23.2% |
| Studio | $1530 | 16.9% | 18.8% |
| 1-bed | $1,708 | 15.2% | 22.5% |
| 2-bed | $2,076 | 14.8% | 25.5% |
Figure 2: National Rent by Unit Size Trend
Metro-level Rents Closely Track Listing Prices, with Exceptions
As we would expect, rent and for-sale listing prices are closely correlated. After all, if renting a home were much less expensive than making monthly payments to own the same home, we would expect homeowners to become renters at a rate fast enough to drive rents back up into equilibrium. Looking at our 50 largest US metros side-by-side makes this trend clear, as almost three quarters (R^2 = 0.745) of the metro-to-metro variation in rent (vertical axis) can be explained solely by the differences in each metro’s median listing price (horizontal axis). Markets above the trend line in red are ones in which rent is overpriced relative to the typical asking price of for-sale listings, while markets below it in green have rents lower than would be expected based solely on the median listing price for that metro.
Figure 3: Median Rent vs. Median Listing Price
Despite the close fit, a handful of markets stand out in terms of their true median rent compared to what we would expect based on their median listing price. Miami, unsurprisingly, is one of these. Rents in Miami have been exploding in year-over-year terms during the last several months, as have for-sale listing prices, which are up 45.9% from May 2021. Even with the median listing surpassing $625,000, median rent in the Miami metro area is $727 per month higher (the vertical distance between the darkest red circle and the gray line) than the for-sale prices would suggest. The other metros where rent exceeds expectations the most are New York City (+$575), Riverside (+$556), Boston (+$490), and San Diego (+$398).
All five of these markets are ones where housing is just plain expensive–each is in the top 12 for median listing price and top 8 for median rent–but other complicating factors have made renting relatively more expensive in these metros too. Miami, Boston, and New York are among the 8 markets where active for-sale listings have fallen the most year-over-year. Many people who might otherwise buy a home are instead renting because there aren’t any homes to buy in the centrally located areas where they’re returning to work. This can drive up rent in the city center faster than the prices of the remaining for-sale listings, which may be more distributed throughout the area. For the two California cities in this set, youth is a major factor. The median age in Riverside is 36 and in San Diego it’s 37, landing these metros among the youngest 7 in our data set. The high concentration of millennials and zoomers means rental demand is sky high as the young Californians slowly work toward becoming homeowners.
Also notable on this graphic are the green circles, metros where renting a home is less expensive than what for-sale listing prices would predict, at least based on the rent-to-listing price comparison. The standouts from this low-rent set are much more well-distributed than the high-rent set in terms of price points. The metro where rents are lowest relative to what listing prices would predict (-$564) is San Jose, where the median listing price is nearly $1.5 million. The second-most attractive renting metro based on predictions from listing prices (-$530) is Oklahoma City, where the median listing price is just under $330 thousand. Spread out between these extremes are Kansas City (-$351), Seattle (-$287), and Austin (-$284). What is the common thread between these cities where rents are lower than listing prices would indicate? They are all home to bustling local economies with unemployment rates of 2.6% or lower in April 2022, landing all five in the bottom fifteen ranks of that measure. When jobs are abundant, homeownership is more feasible for existing residents and new arrivals, which takes pressure off of the rental market and makes renting a home relatively more affordable. Low unemployment also attracts investment from property managers pursuing a more reliably on-time base of payers to collect from, bringing more rental units on line.
Out of the scatter plot and into the real world, the two sides of this trend line lend some insight to prospective first time homebuyers, for the moment at least. The person renting a home in Austin and saving up to purchase a home of their own might look at this and feel affirmed. After all, rent is relatively cheap, and the longer they wait out high listing prices, the more money they will have squirreled away for that down payment. A person in the same situation in Boston, though, may decide that they’re getting crushed by their monthly rent and that buying in the suburbs might not be so bad after all.
The Best Ability Is Availability When It Comes to Affordable Rents
Rental unit availability is a pattern that pervades this month’s data. According to the Census Bureau, rental vacancy has been on a steady decline since the financial crisis of 2008 all over the country, and has taken a sharp dive in the South since the onset of the Covid-19 pandemic. This is consistent with patterns of relocation that Realtor.com® has tracked in recent months, and it signals that Sun Belt rents will continue to grow. In the past year, the rental vacancy rate has fallen the most in urban (7.3% in 2021Q1 to 5.8% in 2022Q1) and rural areas (7.7% to 6.7%), while suburban vacancy held its already low level (5.8% to 5.6%). We are seeing a rebound from the rush to the suburbs of the early pandemic, as renters are snatching up the previously vacated units in the cities instead. Though the focus of our analysis of Realtor.com® rental listing data does not include rural areas, the availability trends observed by the Census Bureau outside of metropolitan areas suggest that higher rents charged on fewer units is not just a problem for city-dwellers.
In the metro-level breakdown of the same Census data, the two markets out of the 50 largest with the lowest rate of rental vacancy are Riverside (1.8%) and Boston (2.4%), with San Diego (3.7%) and New York (4.1%) also in the bottom 12. If these sound familiar, it’s because they are the markets where rent was significantly higher than listing prices would suggest. When choices for renting are slim, monthly rents are driven up to the point where homeownership is the more appealing option. Conversely, of the 10 markets with the highest vacancy rates in the first quarter of 2022, 9 have bottom-half median rents in May. Find these below.
Table 2: Median Rents for Highest-Vacancy Metros
| Metro | Vacancy Rate 22Q1 | Median Rent | Rent Rank |
| Indianapolis-Carmel-Anderson, IN | 10.90% | $1,275 | 47 |
| Pittsburgh, PA | 10.60% | $1,528 | 34 |
| Raleigh, NC | 10.10% | $1,652 | 28 |
| Houston-The Woodlands-Sugar Land, TX | 9.70% | $1,444 | 37 |
| Buffalo-Cheektowaga-Niagara Falls, NY | 9.50% | $1,333 | 44 |
| Cincinnati, OH-KY-IN | 9.00% | $1,473 | 35 |
| Oklahoma City, OK | 8.70% | $1,000 | 50 |
| Tampa-St. Petersburg-Clearwater, FL | 8.40% | $2,093 | 12 |
| Birmingham-Hoover, AL | 8.00% | $1,234 | 48 |
| Charlotte-Concord-Gastonia, NC-SC | 7.80% | $1,719 | 26 |
A high vacancy rate can coincide with a number of other factors, like higher unemployment (Pittsburgh, 4.2%), lower for-sale prices (OKC, $329,150), or a higher median age (Tampa, 43). Ultimately, though, it correlates with lower asking rents, as it indicates areas where supply exceeds demand. With the notable exception of Tampa (and Raleigh and Charlotte to a lesser extent), median rent and rent growth in this set of high-vacancy metros are among the lowest of the fifty metros we study, and we expect this to continue until more empty units are filled.
Table 3: Rental Data – 50 Largest Metropolitan Areas – May 2022
| Metro | Overall Median Rent | Overall Rent YY | Studio Median Rent | Studio Rent YY | 1-br Median Rent | 1-br Rent YY | 2-br Median Rent | 2-br Rent YY |
| Atlanta-Sandy Springs-Roswell, GA | $1,840 | 13.37% | $1,699 | 15.31% | $1,707 | 13.80% | $2,055 | 12.95% |
| Austin-Round Rock, TX | $1,829 | 21.93% | $1,474 | 22.83% | $1,687 | 25.43% | $2,018 | 18.71% |
| Baltimore-Columbia-Towson, MD | $1,811 | 11.04% | $1,425 | 6.18% | $1,707 | 9.39% | $1,915 | 9.43% |
| Birmingham-Hoover, AL | $1,234 | 8.91% | $1,056 | 3.18% | $1,164 | 11.34% | $1,308 | 9.32% |
| Boston-Cambridge-Newton, MA-NH | $2,889 | 21.54% | $2,473 | 26.82% | $2,693 | 19.69% | $3,254 | 25.13% |
| Buffalo-Cheektowaga-Niagara Falls, NY | $1,333 | 9.22% | $1,125 | 2.74% | $1,175 | 6.92% | $1,495 | 8.73% |
| Charlotte-Concord-Gastonia, NC-SC | $1,719 | 18.52% | $1,603 | 22.52% | $1,617 | 18.90% | $1,867 | 13.84% |
| Chicago-Naperville-Elgin, IL-IN-WI | $1,961 | 15.32% | $1,655 | 23.23% | $1,915 | 14.47% | $2,175 | 10.97% |
| Cincinnati, OH-KY-IN | $1,473 | 10.30% | $1,212 | 12.74% | $1,395 | 8.73% | $1,610 | 7.40% |
| Cleveland-Elyria, OH | $1,414 | 10.90% | $946 | 5.58% | $1,317 | 7.51% | $1,537 | 13.43% |
| Columbus, OH | $1,300 | 11.59% | $1,090 | 11.06% | $1,215 | 11.06% | $1,401 | 8.15% |
| Dallas-Fort Worth-Arlington, TX | $1,676 | 19.68% | $1,439 | 21.43% | $1,543 | 20.98% | $1,958 | 18.71% |
| Denver-Aurora-Lakewood, CO | $2,010 | 12.89% | $1,636 | 13.61% | $1,884 | 13.49% | $2,369 | 13.89% |
| Detroit-Warren-Dearborn, MI | $1,415 | 7.20% | $1,115 | 12.06% | $1,185 | 6.71% | $1,581 | 7.15% |
| Hartford-West Hartford-East Hartford, CT | $1,754 | 12.40% | $1,468 | 27.72% | $1,522 | 5.04% | $2,073 | 16.43% |
| Houston-The Woodlands-Sugar Land, TX | $1,444 | 11.12% | $1,362 | 10.87% | $1,325 | 12.72% | $1,630 | 12.41% |
| Indianapolis-Carmel-Anderson, IN | $1,275 | 10.87% | $1,065 | 9.07% | $1,175 | 11.90% | $1,418 | 9.12% |
| Jacksonville, FL | $1,593 | 18.00% | $1,185 | 31.67% | $1,509 | 20.01% | $1,756 | 20.36% |
| Kansas City, MO-KS | $1,316 | 11.05% | $1,024 | 8.36% | $1,243 | 17.33% | $1,499 | 11.00% |
| Las Vegas-Henderson-Paradise, NV | $1,648 | 20.17% | $1,295 | 29.63% | $1,518 | 19.72% | $1,744 | 17.88% |
| Los Angeles-Long Beach-Anaheim, CA | $3,019 | 17.70% | $2,313 | 17.39% | $2,789 | 20.89% | $3,462 | 16.71% |
| Louisville/Jefferson County, KY-IN | $1,224 | 13.81% | $1,005 | 11.61% | $1,149 | 13.60% | $1,397 | 10.96% |
| Memphis, TN-MS-AR | $1,413 | 17.71% | $1,151 | 6.67% | $1,362 | 17.92% | $1,543 | 18.75% |
| Miami-Fort Lauderdale-West Palm Beach, FL | $2,843 | 45.77% | $2,413 | 41.83% | $2,500 | 38.89% | $3,201 | 45.48% |
| Milwaukee-Waukesha-West Allis, WI | $1,578 | 12.68% | $1,263 | 10.75% | $1,465 | 10.57% | $1,770 | 10.63% |
| Minneapolis-St. Paul-Bloomington, MN-WI | $1,590 | 4.23% | $1,250 | 4.60% | $1,497 | 3.24% | $1,944 | 2.91% |
| Nashville-Davidson–Murfreesboro–Franklin, TN | $1,749 | 20.62% | $1,685 | 16.21% | $1,625 | 19.05% | $1,895 | 22.30% |
| New Orleans-Metairie, LA | $1,805 | 12.81% | $1,407 | 27.91% | $1,618 | 8.37% | $2,108 | 13.92% |
| New York-Newark-Jersey City, NY-NJ-PA | $2,872 | 18.66% | $2,616 | 30.80% | $2,565 | 14.00% | $3,254 | 16.20% |
| Oklahoma City, OK | $1,000 | 11.18% | $936 | 33.71% | $911 | 8.45% | $1,099 | 14.43% |
| Orlando-Kissimmee-Sanford, FL | $1,955 | 28.37% | $1,691 | 24.34% | $1,811 | 27.41% | $2,221 | 30.26% |
| Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | $1,800 | 7.46% | $1,525 | 8.16% | $1,717 | 5.57% | $1,995 | 5.00% |
| Phoenix-Mesa-Scottsdale, AZ | $1,788 | 16.56% | $1,424 | 16.15% | $1,626 | 15.78% | $1,972 | 14.65% |
| Pittsburgh, PA | $1,528 | 6.59% | $1,275 | 10.39% | $1,510 | 8.99% | $1,673 | 3.24% |
| Portland-Vancouver-Hillsboro, OR-WA | $1,798 | 10.92% | $1,444 | 7.28% | $1,750 | 11.11% | $2,138 | 8.17% |
| Providence-Warwick, RI-MA | $2,198 | 23.80% | $1,752 | 16.80% | $1,920 | 23.87% | $2,500 | 31.58% |
| Raleigh, NC | $1,652 | 19.50% | $1,478 | 20.65% | $1,525 | 22.00% | $1,833 | 18.61% |
| Richmond, VA | $1,460 | 15.87% | $1,185 | 18.86% | $1,326 | 15.76% | $1,570 | 15.02% |
| Riverside-San Bernardino-Ontario, CA | $2,617 | 9.48% | $1,842 | 22.44% | $2,159 | 10.72% | $2,858 | 8.86% |
| Rochester, NY | $1,367 | 11.59% | $1,005 | 10.99% | $1,305 | 14.47% | $1,497 | 12.94% |
| Sacramento–Roseville–Arden-Arcade, CA | $2,090 | 8.57% | $1,844 | 7.81% | $1,968 | 6.84% | $2,255 | 7.64% |
| San Antonio-New Braunfels, TX | $1,397 | 17.35% | $1,254 | 13.44% | $1,282 | 18.77% | $1,600 | 18.96% |
| San Diego-Carlsbad, CA | $3,099 | 22.73% | $2,484 | 19.69% | $2,873 | 23.55% | $3,450 | 18.97% |
| San Francisco-Oakland-Hayward, CA | $3,056 | 10.09% | $2,431 | 10.05% | $2,802 | 10.43% | $3,522 | 6.76% |
| San Jose-Sunnyvale-Santa Clara, CA | $3,253 | 19.80% | $2,545 | 22.36% | $3,039 | 21.90% | $3,665 | 19.58% |
| Seattle-Tacoma-Bellevue, WA | $2,233 | 16.58% | $1,859 | 21.90% | $2,217 | 15.93% | $2,673 | 15.46% |
| St. Louis, MO-IL | $1,346 | 6.45% | $1,017 | 7.05% | $1,290 | 8.86% | $1,469 | 4.89% |
| Tampa-St. Petersburg-Clearwater, FL | $2,093 | 22.37% | $1,965 | 21.00% | $1,879 | 21.19% | $2,342 | 24.55% |
| Virginia Beach-Norfolk-Newport News, VA-NC | $1,567 | 12.65% | $1,352 | 9.97% | $1,474 | 12.52% | $1,686 | 9.27% |
| Washington-Arlington-Alexandria, DC-VA-MD-WV | $2,150 | 11.98% | $1,745 | 12.19% | $2,054 | 11.93% | $2,562 | 9.91% |
Methodology
Rental data as of May for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. We use communities that reliably report data each month within the top 50 largest metropolitan areas. National rents were calculated by averaging the medians of the 50 largest metropolitan areas.Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
The trend visualized in Figure 3, median metro rent as a function of median metro listing price, is a basic OLS regression model in which each of the 50 metros studied is an observation. The residual figures quoted are the difference between the actual value and the predicted value for median rent. The sizes of the points in the visual correspond to the number of households in each metropolitan area.
Note: With the release of its May 2022 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting rental listing trends and metrics. The new methodology is expected to yield a cleaner and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since May 2022 will not be directly comparable with previous releases (files downloaded before May 2022) and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
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Joel Berner,
Danielle Hale
