A shortage of homes for sale has forced more prospective buyers to rent. That is driving up prices in the rental market.
The U.S. median rental price in June jumped 8.1% compared to a year ago, reaching $1,575, realtor.com® reports. Also, two-bedroom units saw the largest increase in rents at 10.2%, as the demand for more space continued to remain high.
Rental prices in 44 of the largest 55 metros broke records last month. The largest gains were recorded in Riverside, Calif.; Tampa; and Phoenix, which all posted increases above 20% year-over-year, realtor.com® reports.
“The surge we’re seeing in rental prices is likely to exacerbate the K-shaped, or uneven, nature of the pandemic recovery in the U.S.,” says Danielle Hale, realtor.com®’s chief economist. “Rents are rising at a faster pace than income, which is adding to the challenges faced by lower-income Americans as they struggle to recover from job losses and other hardships brought about by COVID.”
Rental prices aren’t likely to ease unless there is a shift with a higher number of homes for sale and rent, Hale adds.