Housing prices might be beginning to slow their ascent, but rent across America is still sky high—and it’s going up even faster than before.
That’s the message from Trulia’s monthly Rent Monitor. The May report shows rents are up an average 5.1% nationally since this time last year.
Apartment rents—up 5.8% annually—drove most of the increase, while rent for single-family homes increased 2.1%. And renting got more expensive in all of the 25 largest rental markets.
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According to Census Bureau data, national rent prices have gone up every year since 2012, and every quarter since the second quarter of 2013.
|Metro Area||% Rent Increase YY|
|San Francisco, CA||15.60%|
|San Diego, CA||11.30%|
Rent growth also accelerated in the last month. Year-over-year rent increases were higher in May than in April in 21 of the 25 largest markets.
Cities where rent is growing the fastest are St. Louis, Sacramento, Philadelphia, Baltimore, and Oakland. St. Louis lead the pack with a 6.10% increase in year-over-year rent growth from April to May.
|Metro Area||Rent Increase, April to May|
|St. Louis, MO-IL||6.10%|
The worst place for renters to be? San Francisco.
Rent in the city by the Bay went up 15.6% since last year, and that city also has the dubious of honor of hosting America’s most expensive rental units. The median rent for a 2-bedroom dwelling in San Francisco is a whopping $3,550.
|Metro Area||Median Rent|
|San Francisco, CA||$3,550|
|New York, NY-NJ||$3,500|
That’s the highest in the nation, and over $1,000 more than all other cities except the New York City metro area. (Average 2-bedroom rent around the Big Apple is $3,500).
Trulia’s Chief Economist Jed Kolko believes an improving economy is the cause of increasing rental prices.
“We’re at a stage in the recovery where more houses are being formed,” said Kolko, referring to an increasing number of people looking for their own place to stay.
As previously out-of-work young people find jobs, they’re moving out of their parents’ homes and becoming renters, says Kolko.
He predicts rent gains might slow as new rental units come available this year (rental construction reached a 15-year high in 2013), depending on how much job and income growth fuel demand.