The RENTCafé in conjunction with Yardi Matrix says Same Trend, Different Year: January Brings Further Rent Increases, Fueled by Demand.
The priciest cities for renters remain big urban job centers on both coasts, with Manhattan, NY at the top of the list with an average apartment rent of $4,079, unchanged from the previous month and down slightly by -1% over the year.
If renters living in The Golden State where hoping for a respite from high rents in the new year, they’re not getting it yet. Prices went up again in January in all 5 California cities in the top 10 most expensive for renters, with the highest rates in the state being in San Francisco, $3,448/month. Jersey City apartments, the sixth most expensive in the U.S., also saw increased rates this month, reaching $2,855.
Wichita, KS, Tulsa, OK, and Toledo, OH remain the country’s top 3 most affordable cities for renters, alongside 7 other Midwestern and Texan towns where average rents do not exceed $730/month, a fraction of the prices in coastal cities. In fact, things have been quiet in these parts of the country, as rents remained flat or grew slower than the national average in 9 out of 10 cities. Fort Wayne, IN was the only one to see a significant jump in prices for the year, 4.5%.
- The national average rent was $1,361 in January 2018, 2.8 percent higher than this time last year, and flat month over month, according to data from Yardi Matrix.
- 89 percent of the nation’s biggest cities have seen rents grow in January, in 9 percent of cities rents remained unchanged, while only 2 percent experienced rent drops compared to 2017.
- America’s smaller cities are continuing to see the greatest increases, with Gilbert, AZ (8.5%), Roseville, CA (8.5%), and Fort Collins, CO (7.9%) breaking the top 10.
Please re-read point number one.
I received the article about a week ago from the RENTCafé but held off writing this article until today over concerns about the national average.
My contact confirms the national average is a weighted average, not simply an average of all the markets straight up.
In simple terms, New York has more weight in the national index than Chicago. In turn, Chicago has more weight than St. Louis. The same applies within smaller geographic areas.
This is exactly as it should be, and it stopped me in my tracks. The following chart will explain why.
CPI OER vs. Primary Rent
National Rental Increase Estimates
- RENTCafé: 2.8%
- BLS OER: 3.17%
- BLS Primary Rent: 3.69%
The RENTCafé data is for January but the BLS data is for December. Assuming the data was reflective of December, the reported CPI would have declined a fair amount.
CPI data for January is due February 14. At that time, we will be able to calculate the actual impact if the BLS was to use Yardi Matrix data instead of its own.
The preliminary indication is the CPI would be lower and this is contrary to expectations given news that rents rose in 89% of major markets.
Mike "Mish" Shedlock