Monthly Asking Rent In The U.S. Increased 17%: Redfin

Business

The median monthly asking rent in the U.S. has been steadily increasing in recent months and has reached record highs in the month of March, according to a new report from technology-powered real estate brokerage Redfin (redfin.com).

The median monthly asking rent increased 17 percent year-over-year to reach a record high of $1,940 in March. This is the largest annual jump since at least February 2020.

The housing market has been heating up due to the steep increase in national median monthly mortgage payment for homebuyers largely because mortgage rates climbed to 5 percent from under 3 percent in the past three months.

The national median monthly mortgage payment for homebuyers also rose, but at double the pace of asking rent, by 34 percent year-over-year to $1,910. This is also the largest increase in Redfin’s records.

This steep increase in mortgage payments has pushed many potential buyers out of the for-sale market to the rental market, which has increased the demand and rents in the market.

“Many potential first-time homebuyers are quickly being priced out of the market by record-high home prices and fast-increasing mortgage rates,” said Redfin Chief Economist Daryl Fairweather.

However, Redfin’s report reveals that the sale prices or mortgage rates are currently not expected to drop even as home purchase market is showing early signs of a cooldown, which is expected to slow down the price growth in the coming months.

The mortgage payment increases has outpaced asking rent increases in 44 of the 50 largest U.S. metro areas in March, with rent increases the highest in Portland, Oregon, hitting over 40 percent year-over-year.

The second highest asking rent increase was over 38 percent in Austin, Texas, followed by the Tri-State Area and many parts of Florida with rental increases of 30 percent or more.

Meanwhile, only two of the 50 most-populous metro areas saw rents fall in March from last year, with rents declining 10 percent in Milwaukee and 1 percent in Kansas City, Missouri.

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