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As rising interest rates and soaring home values prevent more families from buying a home, rental demand has soared, with rental prices highest in the sunniest states.
Rent prices for single-family homes have ballooned in the first half of 2022, reaching a national average of $2,495 per month – a 13.4% increase from the same period in 2021, according to a new report from the house national real estate brokerage HouseCanary.
While cities in warmer climates like California and Florida dominated the list for the highest median rental prices, Midwestern states like Ohio took the top spots for the most affordable rents, according to the report.
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The findings come as more Americans, including six-figure earners, live paycheck to paycheck amid rising costs.
Annual inflation jumped 9.1% in June, rising at the fastest pace since late 1981, according to the US Department of Labor.
5 American subways with the most expensive monthly rents
These U.S. metropolitan real estate markets had the highest median monthly single-family rents during the first half of 2022:
- Los Angeles; Long Beach, California; Anaheim, California: $4,664
- San Diego; Carlsbad, CA: $4,617
- Bridgeport, Connecticut; Stamford, Connecticut; Norwalk, Connecticut: $4,352
- San Jose, California; Sunnyvale, California; Santa Clara, CA: $4,294
- Oxnard, California; Thousand Oaks, California; Ventura, CA: $4,259
5 American metros with the cheapest monthly rents
These U.S. metropolitan real estate markets had the lowest median single-family monthly rents during the first half of 2022.
1. Youngstown, Ohio; Warren, Ohio; Boardman, Ohio: $861
2. Madison, Wis.: $1,000
3. Little Rock, Arkansas; North Little Rock, Arkansas; Conway, Arkansas: $1,153
4. Flint, Michigan: $1,243
5. Davenport, Iowa; Moline, Ill.; Rock Island, Ill.: $1,313
Remote work can dampen wage growth
The pandemic accelerated the trend to leave expensive coastal cities for more affordable areas as more Americans turned to remote work.
And a record number of US homebuyers are still considering cheaper options in cities like San Francisco, Los Angeles and New York, according to a July report from Redfin. However, working remotely can have a hidden cost.
While many have appreciated the benefits of remote work, research shows it can stunt wage growth over time, according to a working paper released by the National Bureau of Economic Research.
There may be other “hidden” expenses related to the move
While moving to a less expensive area may lower your rent or mortgage, other unforeseen costs can hurt your budget, experts say.
“Losing your network or your village is a big hidden expense,” said certified financial planner Bill Parrott, president and CEO of Parrott Wealth Management in Austin, Texas.
Without access to friends and family, costs such as childcare, pet sitting and more can add up quickly, he said.
And traveling can be more expensive from a small town, depending on your airport or transportation options, said Caleb Pepperday, Pittsburgh-based CFP and wealth adviser at JFS Wealth Advisors.
“It’s best to research some of these costs before moving to a new city to help you make your decision,” he said.
Correction: This story has been updated to correctly identify US subways with the lowest monthly rents.