Rising Apartment Rents Significant in These Three New England Towns
Based on over-valued apartment homes, Springfield, New Haven, and Worcester are among the dramatic.
Grabbing researchers’ attention this month were Springfield, Mass.; New Haven, Conn.; and Worcester, Mass.
Springfield renters paid an average of about $1,615, a year-over-year increase of 14.73 percent, tops in the nation, based on the Waller, Weeks & Johnson Rental Index.
New Haven had the seventh-highest in rent increase and Worcester was eighth.
This is the first time those three New England markets have cracked the top 10 since our index debuted in May 2022, Ken H. Johnson, Ph.D., an economist at Florida Atlantic University’s College of Business, said in prepared remarks.
“It appears that return-to-work mandates in this part of the country are driving these rental increases,” Johnson said. “Stronger demand is putting pressure on the supply of available units and giving landlords more freedom to raise rents.”
The report showed that Florida finally saw some relief in recent months, but it is still home to the top three most overvalued markets based on premiums paid by renters, the index shows.
Cape Coral-Fort Myers led the country with an average rent that is 16.97 percent above the long-term rental trend for that market. North Port-Bradenton (14.86 percent) and Miami (13.42 percent) rank second and third, respectively.
Tampa ranked No. 9 with an 8.85 percent premium, while the national average premium was 5.74 percent.
Shelton Weeks, Ph.D., of Florida Gulf Coast University’s Lucas Institute for Real Estate Development & Finance, said in prepared remarks that the ongoing recovery from Hurricane Ian in September almost certainly continues to affect Southwest Florida.
“Material shortages and labor costs continue to be hindrances to redevelopment, creating an inventory crisis,” Weeks said. “Faster repairs to existing properties and new building projects are very much needed.”
Sacramento and Minneapolis were the only markets in which the average rents were below the long-term pricing trends, FAU’s report showed.
San Jose posted the highest average monthly rental rate in the U.S. in January at $3,173, and the lowest was in Wichita, Kansas, at $999, according to the report.
“As a whole, the monthly results are suggestive of slowing rents around the country, and this is very good news,” Bennie Waller, Ph.D., of The University of Alabama’s Culverhouse College of Business,” said in prepared remarks.
“Slowing rent growth should quickly work its way into national measures of inflation. Housing is a major component of the inflation measure, implying that as rents continue to slow so will inflation.”