Sky-High Rental Prices Surpass Pre-Pandemic Levels By More Than 25%

Abstract

Sky-High Rental Prices Surpass Pre-Pandemic Levels By More Than 25% Rental affordability remained a significant challenge for many renters across the country in May. getty Rental affordability remained a significant challenge for many renters across the country in May. The pandemic fueled a meteoric rise in rental prices, and a severe shortage of supply isn't helping. A key factor driving the ongoing rent surge is a lack of supply, as rental vacancy rates, which were already trending lower, have taken a sharp dive during the pandemic. While May marked the 10th straight month of double-digit annual growth in national rents, the increase was the smallest since September 2021, offering renters a glimpse of a light at the end of the tunnel. If rent growth continues cooling, typical asking rents may not reach that milestone until next year. Still, rental affordability remained a significant challenge for many renters across the country in May dealing with inflation. On one end of the spectrum, major tech hub Boston held the nation's fifth highest rent in May after posting a vacancy rate of just 2.4% in 2022-Q1. Conversely, renters may find more affordable options in relatively smaller and less densely populated secondary metros. Of the 10 areas with the highest vacancy rates, nine were among May's lowest-priced rental markets, led by Indianapolis with a significantly lower overall rent and higher vacancy rate than in Boston.