Enormous Apartment Demand Keeps Pace with Record-Breaking Supply

The median rent for a one-bedroom apartment in New York City has 12.8% year-over-year for August to $4,500, an all-time high for the second month in a row. Meanwhile, nationwide, that category increased only 1.6% to $1,534, according to Zumper’s National Rent Index.

Jersey City, New Jersey, followed New York with a median one-bedroom rent of $3,400 and San Francisco hit a four-year high at $3,160.

Two-bedroom median rent climbed 2.7% across the country to $1,915 in August, according to the index. Both one- and two-bedroom rents climbed 0.2% month-over-month across the country.

Zumper said growing national rates even during a time of soaring supply highlight what it called “enormous rental demand” across the country. Many multifamily operators are reporting high resident retention this year, as few people are leaving the rental market to buy homes. U.S. rental vacancy has stayed consistent at 6.6% for the first half of the year.

“In an era where the amount of new supply is shattering records, it’s remarkable to see vacancy rates holding steady this year,” said Zumper CEO Anthemos Georgiades. “Strong renter retention alongside our growing national rent index underscores the robust demand present in the U.S. market.”

In New York, median one-bedroom rent has nearly doubled since January 2021 when it hit an all-time low of $2,350. By 2023, vacancy in the city had fallen to 1.4%, the lowest level since 1968, signaling a shortage in available housing supply. A resurgence in urban living and return-to-office policies are bringing suburbanites back to the city, and peak summer moving season is further applying upward pressure to rents, said Zumper.

San Francisco’s uptick in median rent is noteworthy as its price point has remained fairly consistent at $3,000 for the past two years. Its recent rent growth could signal a recovery from 2021 when occupancy rates dropped to 92.2%, said Zumper.

Some of the top cities with the largest annual rent price growth rates across the country were college towns, which have proven to be resilient due to strong economies, with high student demand and limited supply, said Zumper. For example, Syracuse, New York, which is home to at least 11 colleges, universities and technical schools, continues to have the largest annual rent price growth rate across the nation at 31.6%.