Rents have gone up in one direction over the past year. Typical rent in the United States is around $1,883 per month, $283 per month more than February 2020, according to Zillow.
Worse still, a spike in mortgage rates drives potential first-time home buyers out of the market and into the rental pool, exacerbating upward pressure on rents in an ever-tighter inventory.
Research compiled by Stessa, a real estate software company, shows that coastal states have the highest rents. Hawaii, California, Massachusetts and New York are all among the most expensive areas to rent.
Aloha State’s median rental cost sits at $2,537. Notable states that appear in the top 10 most expensive lists include Colorado at #8, followed by Florida at #9.
Four of the five most expensive major metros in the United States are in California. San Jose is the most expensive of these locations, with median rents exceeding $3,000 per month.
In fact, for $2,328 — the cost of a San Jose studio, you can rent Three equivalent spaces in the Cleveland, Tulsa, or Cincinnati metro areas, with money remaining.
The cheapest state for renters is Arkansas. The median rent in the Natural State hovers at $881 per month.
Northwest Arkansas recently launched a campaign earlier this year offering 10K in Bitcoin (BTC-USD) and a bicycle to move around the area.
Other affordable states include West Virginia, South Dakota, Iowa, and Kentucky, where median rental costs are all below $1,000/month.
Arizona ranks as the 15th most expensive state for renters. However, Tucson, Arizona’s median rent is $1,140, which ranks it 16th most affordable on the list of 55 major metropolitan areas.
The cheapest major metro area to rent is Cleveland-Elyria at $982/month.
“It’s the new reality”
For many individuals, even the cheapest rents are too high, as salaries have not kept pace with rental costs. This year, the market is expected to continue its upward movement, according to Jeff Andrews, senior market analyst at Zumper, a national rental listings platform.
“The economic conditions that caused rents to rise so rapidly last year are still present. This year has a very similar trend to 2021 and could end up being worse.” he recently told Yahoo Finance contributor Vera Gibbons. “Madness is not temporary. This is the new reality.
Ines is a market reporter and covers stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre
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