2024 US Rent Increase: Rental Assistance and What to Expect
Explore this page for insights on the Expected Rent Increase and Rental Assistance in 2024 amidst the contemporary inflationary trends in the USA. As dollars become scarcer and expenses rise, residents, especially in New York City, are grappling with the ongoing challenge of escalating rents. In 2023, median asking rents surged by over 10%, adding to the financial burden.
Contrary to the previous trend, experts note a recent decrease in US Apartment Rents for the past few months. The latest data reveals a 0.7% overall decrease compared to the previous year. Research indicates that median asking rents in the 50 largest metro areas have fallen to $1,747, marking a $29 decrease from their peak in July 2022.
2024 US Rent Increase Overview
The U.S. Census Bureau’s data reveals that more than 36% of households in the country are renters. Since the onset of the pandemic, renting has become more expensive than ever before, with overall rental prices surging by 29.4%, as reported by the real estate website Zillow. Single-family house rents have experienced even greater growth, reaching 35.7% since the pandemic began.
Multifamily home rents increased by 23.3%, but the growth rate has been decreasing since its peak at 16.2% in February 2022. According to the November rental report, released on December 7, the average asking rent in the United States is currently $1,982, marking a 3.3% increase compared to the same time last year.
Current Direction of US Rent: Up or Down?
In November, there was a 0.2% decrease in asking rents, indicating a stabilization in the rental market, as per the data. This decrease is slightly lower than the 0.1% growth observed from August to September. Historically, rent growth during this time of the year was relatively stable before the pandemic. Despite peaking in February 2022, overall rent price hikes are still below pre-pandemic levels, with rent growth ranging from 4.0% to 4.2% annually throughout 2019.
Zillow attributes the recent decline to the influx of newly constructed multifamily properties entering the market. More than three out of ten rental listings now offer concessions due to this surge in new construction, according to Zillow.
The annual rate of rent increase for single-family houses is higher than that for multifamily rents, based on Zillow’s analysis. Looking at monthly variations, the average rent for a single-family house in November was $2,148, a 0.1% decrease from October. In November, the average price of multifamily dwellings was $1,845, reflecting a 0.3% decrease from October.
While it is expected that high financing costs may impact the expansion of new multifamily development in the future, Zillow notes that renting is currently more affordable than buying, driving increased demand for rental properties.
Yearly Rent Hikes in American Cities
Latest Rent Trends in 50 U.S. Cities:
Overall Rental Housing Increases:
- Providence, R.I.: +7.3%
- Hartford, Conn.: +7.2%
- Cincinnati: +6.4%
- Columbus, Ohio: +5.8%
- St. Louis: +5.7%
Single-family Rentals Growth:
- Providence, R.I.: +9.4%
- Hartford, Conn.: +9.2%
- Cincinnati: +8.3%
- Milwaukee: +7.2%
- Chicago: +6.8%
Multifamily Rentals Changes:
- Providence, R.I.: +6.9%
- Hartford, Conn.: +6.5%
- Boston: +5.6%
- Columbus, Ohio: +5.6%
- Cincinnati: +5.5%
Anticipated Rent Decline in Multiple US Cities 2024
With increasing mortgage rates and rents, more property owners are likely to opt for renting out their premises, leading to a higher availability of flats in 2024. This abundance of options is expected to provide tenants with greater flexibility in deciding whether to enter into a new lease or extend their existing one, as suggested by experts.
While landlords won’t be permitted to significantly raise rents beyond market rates, a substantial reduction in rents in 2024 would necessitate the addition of approximately 41,000 more rentals to the market, fully reversing the decline in inventory that occurred after 2019.
Factors Influencing Rent Increase
Factors Behind Rent Increases
Rent hikes are influenced by various factors, including supply chains, population shifts, housing regulations, and vacancies. Economic and social elements impact rent in almost every state, with varying degrees of importance. Here are a few key factors:
- Inflation: While rental prices, growth, and inflation may not increase at the same rate, they often correspond. In 2021, rent prices rose by over 10.1%, while inflation increased by 6.3%. Inflation, especially in real estate costs, prompts landlords to raise rent to cover the expenses passed on to renters.
- Insufficient Stock: Affordable and unoccupied rental properties are scarce, contributing to rent increases.
- Discounts and Freezes on Expired Rent: Landlords are adjusting the cost of new apartments and lease renewals to compensate for rent freezes during the pandemic and significant discounts in urban areas.