Home prices have soared to new heights, and mortgage rates are the highest they’ve been in nearly twenty years. According to the National Association of Realtors, the median price for existing homes jumped by 2.8% in September 2023 compared to the previous year, hitting $394,300. At the same time, 30-year mortgage rates topped 7% in October 2023, the highest they’ve been since 2000, according to the Federal Reserve. Because of this, more Americans are looking at renting as a viable option.
In September 2023, rental prices dropped for the first time in six months, but they’re still high overall. Since reaching a low point in February 2024, rental costs have been climbing, with an increase of $74, or 3.82%. This article will explore current rental rates in the U.S., discuss what’s happening in the market, and provide a forecast for rent increases in September 2024.
USA Rent Increase: September 2024
The housing market is facing some tough challenges right now. Home prices have been going up, partly because mortgage rates are at their highest in nearly 20 years. In September, the median sale price for existing homes climbed by 2.8% from the previous year, reaching $394,300. Meanwhile, the Federal Reserve reported that 30-year mortgage rates topped 7% in October, a level not seen since 2000. Because of this, more people are considering renting instead of buying.
On a brighter note, rental costs actually fell in September for the first time in six months. However, rent is still high, having gone up by $74, or 3.82%, since February. If you’re looking for a rental, it’s important to be careful and well-informed. This article will not only discuss the current rental trends in the US but also predict how rent might change in September 2024.
USA Rent Increase Percentage 2024
| Title | USA Rent Increase September 2024 |
| Country | The USA |
| Year | 2024 |
| USA Rent Increase Percentage 2024 | 8.83% |
| Median Monthly Rent in US | $2,011 |
| Category | Finance |
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USA Rental Market Overview for 2024
Rent Prices Are Returning to Pre-Pandemic Levels: In March, national average rent went up by 0.6% from the previous month. Although this rise is slightly below the pre-pandemic average of 0.7%, it shows that rent increases are starting to revert to the levels seen before COVID-19.
Single-Family Homes Are Becoming More Expensive: The average monthly rent for a single-family home in the U.S. is now $2,183, marking a 0.7% increase from last month. Since early 2020, rent for single-family homes has surged by 37.5%, possibly because older millennials are moving into larger spaces.
Multi-Family Rentals Aren’t Rising as Quickly: Initially, multi-family rentals saw a temporary boost compared to single-family rentals at the start of the pandemic. However, in March, the rent for multi-family units grew by just 0.5% month-over-month.
East Coast Rents Are Climbing Faster: Rent prices on the East Coast are increasing more quickly than those on the West Coast. This trend is evident even though rents are rising in the 50 largest metro areas across the country.
Landlords Are Offering More Incentives: In March, one-third of rental listings on Zillow featured perks like a free month’s rent or complimentary parking. These incentives are becoming more common, especially in areas where new construction has caused an imbalance between supply and demand.
Why Is Rent Going Up in 2024?
Since 2020, rent has increased significantly, and several factors are driving this rise. Here are six main reasons:
- Inflation: The cost of living has been steadily rising in the U.S. since 2020. This increase in rent contributes to higher overall prices, creating a cycle of inflation.
- Supply and Demand: There hasn’t been enough new construction to address the shortage of rental units. This imbalance gives landlords the upper hand, making the rental market more competitive.
- End of Rent Freezes: During the COVID-19 pandemic, many places had rent freezes or discounts. Now that those are over, landlords are raising rents to make up for the lost income.
- Remote Work: With more people working remotely, those who once lived in big cities are moving to smaller towns and suburbs. This shift has created sudden spikes in demand in these areas, especially if there aren’t enough homes available.
- Changing Lifestyles: More people are living alone now than ever before, boosting demand for studio and one-bedroom apartments. Single people also tend to spend more since they don’t share costs with a roommate.
- High Home Prices: Home prices have surged by 162% from 2000 to 2022, but incomes haven’t kept pace. As of November 2023, buying a median-priced home in the U.S. requires an annual salary of $166,600, while the average household income is only $59,384.
These factors together are making rent more expensive and affecting many renters across the country.
What Are Rental Prices Like in September 2024?
In September 2024, the average rent in the U.S. was $2,011 per month. This shows a slight increase of 0.40% compared to last year but a drop of 2.02% from August.
September tends to be a quieter month for renting compared to the busy spring and summer seasons. Moving in September can be challenging for families because it coincides with the start of the school year. Even so, rents remain quite high.
Looking back, rental prices surged by over 11.5% from October 2021 to September 2022. Last September, rents went up by 8.83%, but then they fell until February before starting to rise slowly again. Since then, prices have been climbing steadily, increasing by more than 4%.
FAQs
Why is rent going up in the USA?
Rent is going up mainly because of inflation in the country.
Is September a good time to rent a place?
Not really. Rent prices in September are often higher compared to other months.
Did rent go up in September 2023?
Yes, rent increased by 8.83% in September 2023.