Rents have been going one way over the last year — up. Typical rent in the U.S is about $1,883 per month, $283 per month higher than in February 2020, according to Zillow.
Making matters worse, a spike in mortgage rates is pricing would-be first time home buyers out of the market, and into the rental pool, exacerbating the upward pressure on rents amid ever tighter inventory.
Research compiled by Stessa, a real estate software company, shows the coastal states have the highest rents. Hawaii, California, Massachusetts, and New York are all among the most expensive areas to rent.
The Aloha State’s median rental cost sits at $2,537. Notable states which make the top 10 most expensive list include Colorado at #8, followed by Florida at #9.
Four of the five most expensive large metros in the U.S are in California. San Jose is the most expensive of those locations, with median rents topping $3,000 per month.
In fact, for $2328 — the cost of one studio apartment in San Jose, you can rent three equivalent spaces in either Cleveland, Tulsa, or Cincinnati metro areas, with money left over.
The cheapest state for renters is Arkansas. The Natural State’s median rent hovers at $881 per month.
Northwest Arkansas recently launched a campaign earlier this year offering 10K in Bitcoin (BTC-USD) and a bike to relocate to the area.
Other affordable states include West Virginia, South Dakota, Iowa and Kentucky, where rental median costs are all under $1000/month.
Arizona ranks #15 on the most expensive states for renters. However Tucson, Arizona’s rent median is $1,140, which ranks as the 16th most affordable on the list of 55 large metro areas.
The cheapest big metro region for rent is Cleveland-Elyria at $982/month.
'It's the new reality'
For many individuals, even the least expensive rents are too high, given that wages haven't risen at the same pace as rental costs. This year the market is expected to continue its upward movement, according to Jeff Andrews, senior market analyst at Zumper, a national rental listing platform.
“The economic conditions that drove rents up so rapidly last year are still present. This year is trending very similarly to 2021 and could end up being worse," he recently told Yahoo Finance contributor Vera Gibbons. “The madness is not temporary. It’s the new reality.”
Ines is a markets reporter covering stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre
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