While home price growth in 2022 is expected to slow substantially and many markets are considered overvalued, rental prices could be the next corner of the real estate world to watch.
A new study from Zumper shows that rent prices jumped an average of 11.6% on a one-bedroom this year, with the average two-bedroom unit costing 13.6% more. That’s prompting people to consider a move.
The 2021 Annual Rent Report interviewed over 9,000 renters throughout the U.S.—and some 81.6% of those said they are planning a move in the next 12 months.
Over half of the people Zumper spoke with said they’re already paying more than they did before the pandemic. But will an increase in demand for new units send prices even higher? It depends whom you ask.
Significantly increased demand in 2021 was a big factor in the price surges over the past 12 months. And Realtor.com says it’s going to continue to drive them even higher.
“At a national level, we forecast rent growth of 7.1% in the next 12 months, somewhat ahead of home price growth as rents continue to rebound from slower growth earlier in the pandemic,” the group said in its 2021 housing forecast.
Zumper’s CEO, however, says that might not be the case.
“2021 was the most unpredictable year for the real estate industry in modern history,” said Anthemos Georgiades in a statement. “After 12 months of skyrocketing rent, the most recent data show rent growth slowing down, which could foreshadow a less volatile 2022.”
That said, it’s still hard to find a place. The number of people who had to file more than one application to find an apartment was on the rise this year, as finding a rental became more difficult. And rent in many East Coast cities hit all-time highs. A one-bedroom in New York City now averages $3,190—and prices in Miami, Orlando, and Tampa jumped 32% to 38% this year.
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