Rents are continuing to rise in some US cities, and the ones hardest hit are located in two specific regions.
Nationwide, rents have declined modestly, but the opposite is happening at a handful of America’s biggest metropolitan areas.
Less than half – 18 of 50 – of the largest metros saw year-over-year rent increases for one- and two-bedroom units in March, according to a Realtor.com rent report at the end of April.
The top five cities on the list were all in the Northeast and Midwest.
In the Northeast especially, supply and demand has been driving factors in raising rents, as the region lacks available land for building multi-family units, according to Realtor.com economist Jiayi Xu.
‘The high housing prices in these expensive markets, plus elevated mortgage rates, may force people to stay in rental markets longer’ instead of buying, said Xu.
As more tenants wait delay purchasing homes, they boost the demand for rentals, she said. In addition, lower unemployment rates can drive up demand for housing units.
Here are the top five US cities where rent is rising:
1. Chicago, Illinois
The third most populous city in the US, Chicago, saw the greatest increase in rent. The median rent in March was $1,846, a 4.3% increase in a year.
2. New York City, New York
America’s most populous city, New York City had the second highest rise in rent. The median rent in March was $2,876 which was an increase of 3.8% from the prior year.
3. Kansas City, Missouri
Kansas City, Missouri, rounded out the top three cities where rent is rising the most. The median rent in March was $1,340 which represents a 3.4% increase from a year ago.
4. Boston, Massachusetts
Boston took the No 4 spot on the list of cities with rising rent. The median rent in March was $3,023, the highest of the top five. It was a 3.3% increase from the prior year.
5. Indianapolis, Indiana
Taking the last spot on the top five was Indianapolis. The median rent in March was $1,297, which was similar to Boston with a 3.3% increase from a year ago.
Among the three Midwestern cities, Kansas city and Indianapolis are relatively affordable compared to Chicago. Rents rose about $44 and $41 in Kansas City and Indianapolis, respectively, said Xu.
‘For Kansas City and Indianapolis, in addition to affordability, both of them have strong labor markets, with unemployment rates,’ Xu said.
None of the top five cities for rent rise were in the top five US states to live in, as ranked and revealed on Tuesday by U.S. News and World Report.
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