In December, rents in metro areas across the United States experienced the biggest increases since the first COVID cases were recorded in the United States, according to a new report.
The report, released Friday by the online brokerage Redfin, found that December rents rose 14 percent year-over-year in the United States — the biggest increase in two years, while monthly mortgage payments shot up 21.6 percent, the biggest increase in the brokerage’s records.
Redfin Chief Economist Daryl Fairweather attributed the cost spikes to increasing mortgage rates affecting the demand for rentals.
“The growth in mortgage payments has been driven by both climbing prices and climbing mortgage rates,” Fairweather said in a statement. “And those rising mortgage costs push more potential homebuyers into renting instead, which pushes up demand and prices for rentals. Mortgage rate increases are accelerating, which will cause both mortgage payments and rent to grow throughout 2022.”
The average monthly rent in Dec. 2021 sat at $1,877, according to the report, a 0.3 percent increase from the previous month. The average mortgage payment also increased 0.3 percent to $1,533.
Some cities saw rents increase over 30 percent year over year, with Austin, Texas, topping the chart in terms of rent increases. Rents increased 40 percent in the city, according to Redfin.
The second highest rent increases all came from the New York City area, with suburban Nassau County, Newark and New Brunswick, New Jersey, and New York City itself all logging rent increases of 35 percent.
Three Floridian cities — Miami, West Palm Beach, and Fort Lauderdale all saw rents increase by 34 percent, while Jacksonville, Florida saw an increase of 31 percent. Portland, Oregon rounded out the top 10 with a 29 percent increase in rent prices, according to the report.
The only metro area that charted a year over year decline in rents was Kansas City, MO, which logged a miniscule 0.1 percent decline.
While they stayed low throughout 2021, mortgage rates have risen nearly to highs not seen since before the pandemic during the first weeks of 2022, with rates hitting 3.56 percent with an average 0.7 point according to the latest Freddie Mac data.
A recent study by OJO Labs determined that housing costs will be permanently higher for Americans following the pandemic.