The national average monthly rent for a one-bedroom apartment has risen to $940, up eight dollars from $932 in August, according to ABODO’s National Apartment Report for September 2016, a month-over-month analysis of local and national changes in the average monthly rent price.
Miami experienced the highest jump in average monthly rent with an increase of 9% to $1,739 from $1,599 the previous month. Bakersfield, Calif., was tied with Miami at +9%, up to $725 from $669, and Philadelphia came in close behind with a 7% increase, reaching $1,379 from $1,291.
At the same time, Seattle saw a 13% decrease in its average rent, which fell from $2,170 in August to $1,890 in September—the steepest drop in average rent this month and the most drastic fluctuation on the entire list. San Jose, Calif., experienced a 12% drop in its average rent, and Los Angeles (-8%), Boston (-7%), and Charlotte, N.C. (-7%) weren't far behind.
ABODO Senior Communications Manager Sam Radbil attributes these localized drops in the average rent to a growing backlog of apartment inventory. “With construction at its highest level since the 1980s, we believe that a steady decline in rent prices in certain metro areas may be on the way,” he says. “Developers delivered 250,000 new rentals in 2015, and the forecast is for 285,000 more units to be finished in 2016. As we've seen in the past, if vacancy increases and more rental units become available, prices should continue to decrease."
As for the metros where prices are rising, “Some industry experts have suggested that landlords are feeling pressured because of increased demand for units while inventory is low,” Radbil says. “The U.S. rental market saw historically low levels during the mortgage finance boom and has been steadily shifting to historical norms since the mortgage bust.”
Given the incongruity of the rising national average rent and the falling average rents in many major metro areas, ABODO analyzed the most recent American Community Survey from the Joint Center for Housing Studies of Harvard University (JCHS) and determined that the burden of rent increases might be falling on the rural population, as well as smaller cities.
The survey found that 49.3% of renters nationwide were cost-burdened in 2014, meaning they spent at least 30% of their yearly income on rent. Of that number 22% were severely cost-burdened, spending at least 50% of their income on housing. In rural areas, the proportion of cost-burdened renters rose to 41% in 2014, up from 30%. This issue is particularly severe in rural areas near coastal metros, where property values are higher.
Kingston, N.Y., a city two hours north of New York with a population of 24,000, is rated as the nation’s most cost-burdened metropolitan area by JCHS. The city’s average household income is $27,900, but its average monthly rent is $1,000. With a rent price that reaches almost half of the average income, 67.3% of Kingston’s renters are considered cost-burdened, and 39% are severely cost-burdened.