Big cities are back. When the COVID-19 pandemic began, many people fled busy city life for less crowded areas. But now they’re returning in a big way.
Rents in the 10 largest U.S. tech cities—such as New York City and Austin, Texas—have surpassed their March 2020 levels by an average of 6.3%, according to realtor.com®’s monthly rental report. In most of the largest tech cities, the September rental growth rate is higher than prior to the onset of the pandemic.
“The days of rental deals in metros like San Francisco and Manhattan may be over, but there is a silver lining for renters with more flexible timelines,” says George Ratiu, manager of economic research for realtor.com®. “Big city rental competition and high prices is a sign of normalcy, which could precede more seasonal norms like winter cooling in rent growth in parts of the U.S.”
So far, however, there are no signs of slowing. The median rent in the U.S. has increased at a double-digit annual pace—13.6%--for the second consecutive month, realtor.com® reports.
“With rents continuing to surge to new highs nationwide, including in big tech hubs, September data confirms the U.S. rental market has moved past the recovery phase and is fully back in business,” says Ratiu. “Rental demand remains unseasonably high, driven by still-limited housing supply, rising mortgage rates pushing buyers toward renting, and more people returning to big cities.”
Still, rents have not rebounded from pandemic-fueled declines as quickly as for-sale home prices, Ratiu adds. “But rental activity has now reached a level not unlike the homebuying frenzy seen earlier this year,” he notes.
Large urban rental markets started to rebound from the pandemic’s impact in April when vaccines began to roll out. Some of the cities with the largest annual gains in rent are Austin (up 22.3%) and Denver (up 15.5%), realtor.com® reports.
Seattle rents are 8.1% higher in September compared to March 2020, following declines of 12.3% at the city’s lowest point during the pandemic, according to realtor.com®’s analysis.