Multifamily Rent Growth This Year Is Outpacing 2021

Through the first three months of the year, 2022’s national rent growth is outpacing 2021’s rent growth, according to Zumper’s National Rent Report published last week.

“That’s hard to believe given that 2021 may have experienced the sharpest rise in rent of any calendar year in our lifetimes,” Zumper reporter Jeff Andrews said in prepared remarks.

In Zumper’s March data, not only does the median one-bedroom nationally hit an all-time high at $1,400, but it represents a 2.5 percent increase for the year so far, ahead of the 1.9 percent growth at this time last year.

“That rent growth in 2022 is outpacing 2021 is a sobering thought,” Andrews said.

But for context, the most rapid period of growth in 2021 came from May to October, when the median one-bed rent rose by “a shocking” 9.7 percent in just six months, Zumper’s report indicated.

“It’s an extremely high bar for 2022 to keep pace with, even if the year has gotten off to a hotter start,” Andrews said. “Still, it’s not inconceivable that rent growth in 2022 will be on par with 2021. Vacancy rates entering the year were at all-time lows, and in a November survey conducted by Zumper, a staggering 81.6 percent of renters said they planned on moving in 2022.

“That equation—enormous demand and very little supply—equals high rent growth. Add in the fact that the home valuations are projected to keep growing rapidly—and thus price out more renters who would otherwise buy—and it’s not hard to envision a scenario where 2022 ends up outpacing 2021.”

Miami Now Fourth-Most-Expensive on List

Zumper’s report also reported that Miami has passed San Jose to become the fourth most expensive rental market in the country. The shift in the rankings underscores just how quickly rent has risen in Miami and how sluggish rent growth in the Bay Area continues to be two years since the beginning of the pandemic.

Miami experienced the most rent growth of any city in the country in 2021. As of March, Miami has jumped San Jose to fourth on the list, with a median one-bedroom rent of $2,500. That’s a “mind-blowing” 38.9 percent increase over March of last year, according to Zumper.

Nashville, Knoxville Pacing Tennessee

With its (relatively) cheap housing and vibrant cultural scene, Nashville isn’t new to being an attractive city to live in. But the pandemic has supercharged interest in Music City as a destination for people moving on from East Coast cities, and it’s evident in rental data that demand has increased.

Nashville’s median one-bedroom rent is up 25.2 percent year-over-year, with two-bedrooms up 15.2 percent. Knoxville has risen even more, with one-beds up 31 percent and two-beds up 26.9 percent. 

Curiously these gains have not translated to similar gains in other major cities in Tennessee. Memphis’s median one-bed is up just 3.4 percent year-over-year, and Chattanooga’s is up only 7.7 percent.