Rents have been climbing higher and higher, and Americans have felt it in their wallets. A record number of Americans say they expect rents will rise even more over the next year as well, according to a newly released Fannie Mae survey.
Sixty-nine percent of respondents said rental prices will rise. Consumers expect rents to increase by 7.1% over the coming year.
“Persistent increases in asking rents will eventually push up the average rent of the entire stock of units on the market,” the Federal Reserve Bank of San Francisco wrote in an economic brief last month.
The median rent for a one-bedroom apartment rose to an all-time high in February, according to Zumper’s National Index.
The National Mortgage News reports that rents can be a lagging indicator in the Bureau of Labor Statistics’ consumer price index. Most renters don’t see a change until their lease is renewed or they relocate. So many tenants may not have yet experienced the worst of the hikes in asking prices, they note.
Rents in New York jumped 33% between January 2021 and January 2022, according to data from the online listing site Apartment List. That is nearly double the national rate and the highest increase of the 100 largest cities tracked by Apartment List.
“We’re seeing that rents have returned and basically surpassed where they were pre-pandemic,” Nancy Wu, an economist with StreetEasy, a real estate website, told The New York Times.
Nationwide, rents rose nearly 18% in that period, according to Apartment List’s data. Researchers found that even cities that didn’t see a significant decline early in the pandemic, such as in Tampa, Fla., and Phoenix, have still seen large jumps in rents.
Many renters may be aspiring home buyers. But they may be feeling priced out there, too. Home prices have been rising by double-digit percentages over the past year. Forty-six percent of consumers recently surveyed in February said they believe home prices will continue to rise over the next 12 months, and 67% expect mortgage rates to increase as well, according to a separate Fannie Mae consumer sentiment survey.