30 metros where apartment rents have grown the fastest since early 2020

It’s tough to be a homebuyer in today’s housing market but it’s not easy being a renter, either.

An analysis of RealPage Inc. data by The Business Journals found, among 50 of the largest metropolitan statistical areas in the United States, rents grew more than 10% between the first quarter of 2020 and the third quarter of 2021. But many MSAs included in the analysis far outpaced that rate of growth.

The time period used for this analysis shows how rental rates have changed since the Covid-19 pandemic. In early 2020, the multifamily industry was holding its breath, unsure if rents would be collected or what would happen to occupancy. Most secondary markets were stagnant but gateway markets, such as New York and San Francisco, suffered losses as people exited denser markets.

Then, in the second half of 2020 and into 2021, pent-up demand and relocations — some motivated by the pandemic — put the market into overdrive. In 2021 especially, apartment rental rates have been on fire, propelled by demand, new construction and emerging rental product types, such as single-family rentals, that command higher rates.

The Business Journals ranked 30 of the approximately 50 metro areas included in RealPage’s data to determine which areas are seeing faster-than-average rates of rental growth. There likely won’t be a lot of surprises, especially at the top of the list, but the rate of growth for some is eye-popping — more than 20% in some markets.

Click through the gallery above to see which MSAs have seen the fastest rate of rent growth since the pandemic.

What you won’t find: three prominent MSAs where average rents in Q3 2021 were actually below Q1 2020.

• New York-White Plains, New York: Rents have dipped 1.5% since Q1 2020.
• San Jose-Sunnyvale-Santa Clara, California: Rents have dropped 6.6% since Q1 2020.
• San Francisco-Redwood City-South San Francisco, California: Rents have declined the most among the 50, at a rate of 12.4%.

All three of those MSAs, though, posted positive rent growth in Q2 and Q3 2021, suggesting a rebound is underway in those areas. Those three markets remain the most expensive among the 50, too: $3,642 in New York, $3,047 in San Francisco and $2,758 in San Jose at the end of Q3.

Rental-rate growth is expected to continue in Q4 and into early 2022 but multifamily industry executives say the current pace of growth isn’t sustainable. As we head into 2022, I’ll be interested to see what kind of growth we’ll see, especially in the hot Sun Belt cities that see dozens, if not 100-plus, people move to those metro areas by the day.

The challenges in the rental market today also prompts a bigger question about affordability and displacement.

Among the 50 MSAs tracked by RealPage, seven had average rental rates that were below $1,000 per month in Q1 2020. Today, not a single market among the 50 is below $1,043 per month.

You’ll also note that some of the top markets for growth in apartment rents also rank among the hottest housing markets, as you can see in the gallery below.