A perfect storm of hindering factors has pushed the apartment rental market to its limit. The decline of new construction, a global pandemic, supply-chain issues, rapid inflation, and wealthy investors continue to negatively impact Americans’ hopes for a new home. We’re here to equip you with knowledge, so you can make an informed decision in today’s turbulent market. Here’s what we’ve found:
AMERICANS ARE COMPETING FOR A RECORD-LOW INVENTORY
In November 2021, apartment occupancy hit 97.5% in the United States. According to Real Page, Inc., that’s the highest occupancy rate on record! In other words, Americans are competing for the lowest number of available apartments in history. This availability problem may have worsened as of late, but the occupancy rate has been above 90% since the Great Recession back in 2009.
AVERAGE RENTAL PRICES ARE THE HIGHEST EVER RECORDED
Rental prices have risen gradually since the 1940s, but the rate of increase has skyrocketed since 2012. In November 2021, Americans paid an average of $1,631 per month for their apartment. That’s a steep increase from the average for 2020, which was only $1,104. Here’s a brief breakdown of how rental costs have risen:
November 2021: $1,631
Since the turn of the century the average price for an apartment has jumped a staggering $998 per month! However, the rate of increase was especially great in 2021. To make matters worse, real estate experts expect the cost to rent to outpace the cost of owning a home in 2022. Also in their forecast: increased rental prices and higher demand.
FUN FACTS ABOUT THE RENTAL MARKET
After all of that unfortunate news, let’s lighten the mood a little with some interesting facts about the American apartment landscape throughout the years:
• The last time rental prices decreased was 1934.
• The largest leap in the price for an apartment was 18.42% in 1920.
• The largest drop in the price for an apartment was -13.48% in 1933.
• On average, rent prices increase 12.5% faster than wages.
• The average American spends 28.39% of their income on rent.