In recent months, the dour outlook on the U.S. economy has begun to shift. Economic growth, consumer spending, and employment rates have remained strong despite widespread expectations of a recession in 2023. The Federal Reserve has begun to signal that interest rate cuts are on the horizon in 2024. And perhaps most importantly in consumers’ minds, the pace of inflation has been falling back to historically normal levels after reaching a peak in mid-2022.
One area where many Americans continue to struggle, however, is the cost of housing. Increased rents have been one of the persistent factors underlying the price increases of the last two years, as a major component in several common measures of inflation. With high home prices and mortgage interest rates pricing many would-be buyers out of the residential real estate market, rentals have been highly competitive.
Underlying these trends is a long-term shortage of housing stock in the United States. Many builders were hard-hit by the Great Recession, and as a result, the U.S. dramatically underbuilt its housing stock throughout the 2010s. Renters are feeling the consequences: rental vacancy rates are at their lowest level on record. In short, this means that more renters are competing for fewer available units.
Change in Rent From the Year Prior
Rent price growth is showing signs of acceleration after slowing back down to pre-pandemic norms
Source: Construction Coverage analysis of Zillow’s Zillow Observed Rent Index (ZORI) data | Image Credit: Construction Coverage
The long-term supply challenges around housing stock came to a head during the COVID-19 pandemic. Government stimulus and renter protection programs helped keep rents low during the early months of the pandemic, but rent growth began to spike in early 2021. According to data from Zillow’s Observed Rent Index, year-over-year rent growth exploded from just under 2% in February 2021 to over 16% in February 2022. The rate of growth fell back to pre-pandemic levels earlier in 2023, but over the last few months of the year, the year-to-year change in rents began to tick up yet again. And while rates of growth have slowed, overall price growth has continued.
Rent Increase by Rental Size
Median rent increased consistently across all rental sizes
Source: Construction Coverage analysis of U.S. Department of Housing and Urban Development’s (HUD) 50th Percentile Rent Estimates data | Image Credit: Construction Coverage
Over the last year, no part of the rental market has been able to avoid continued price increases. From studio apartments to large homes, rental units of all sizes have seen similarly-sized increases in median rents. According to HUD data, median rents across the board have increased by double-digit percentages from 2023 to 2024.
Geographic Differences in Median Rent Increases
The majority of states saw double-digit rent increases over the past year
Source: Construction Coverage analysis of U.S. Department of Housing and Urban Development’s (HUD) 50th Percentile Rent Estimates data | Image Credit: Construction Coverage
While house size has had little impact on the rates of rent increases, geographic location has. More than half of all U.S. states have seen rent grow by double-digit percentages, most of which are concentrated in the Southeast and Northeast of the country. Rhode Island (+17.9%), Maryland (+17.6%), and Delaware (+17.5%) lead the nation for percent change in median rents. In contrast, Midwestern states like North Dakota (+2.8%) and Iowa (+3.4%) have had far lower changes in rent. But the lowest rent increases have taken place in Hawaii, where median rent rose just 1.7% from 2023 to 2024—welcome news in a place that is already the nation’s most expensive for housing.
At the metro level, the pace of rent changes can be even more stark. In the fastest-increasing markets, renters have seen rents grow by more than a quarter in the last year, but in a handful of cities, rents have actually declined year-over-year.
Below is a complete breakdown of changes in rent prices across more than 350 metropolitan areas and all 50 states. The analysis was conducted by researchers at Construction Coverage, a website that provides construction software and insurance reviews, using data from the Department of Housing and Urban Development’s (HUD) and the U.S. Census Bureau. For more information, refer to the methodology section.
Large Metros With the Biggest Change in Rent Prices
Midsize Metros With the Biggest Change in Rent Prices
Small Metros With the Biggest Change in Rent Prices
States With the Biggest Change in Rent Prices
Methodology
Photo Credit: Grand Warszawski / Shutterstock
The data used in this analysis is from the U.S. Department of Housing and Urban Development’s (HUD) 50th Percentile Rent Estimates and the U.S. Census Bureau’s American Community Survey. To determine the locations with the biggest change in rent prices, researchers at Construction Coverage ranked locations by the percentage change in median rent from 2023 to 2024. In the event of a tie, locations with the greater total change in median rent from 2023 to 2024 was ranked higher. For each location, median rent was estimated by creating a weighted average of HUD’s median rent estimates by unit size using the number of renter-occupied households by unit size as the weighting factor.
To improve relevance only metropolitan areas with complete data were included. Additionally, metros were grouped into cohorts based on population: small (under 350,000), midsize (350,000–999,999), and large (1,000,000 or more).
For complete results, see Cities With the Biggest Change in Rent Prices on Construction Coverage.