The U.S. rental market is experiencing a moderation trend, but prices vary dramatically by region. Jonas Bordo of Dwellsy breaks down which parts of the country are most and least expensive for renters, and which regions are seeing rising (or falling) asking rents.
“When our team looked at the data, we found that some of our preconceived notions about regional rents turned out to be correct – but other assumptions were soundly overturned,” says Bordo, coauthor along with Hannah Hildebolt of Everything You Need to Know About Renting But Didn’t Know to Ask (Matt Holt, August 2023, ISBN: 978-1-6377439-2-8, $21.95). “A region’s overall cost of living plays a major part in setting rent prices, but demand—which can vary substantially between property types—also has a large impact.”
First, a bit of context: The rental market nationwide is in a period of moderation. We aren’t seeing the steep spikes and dips in price that have plagued renters for the past few years.
“In May, median asking rent for a three-bedroom single-family home rental (SFR) was $1,875, which was up 4.5 percent ($80) since May 2022,” says Bordo. “While $80 a month is a significant amount for many renters, this annual rent increase trails just below inflation. The news is even better for apartment-dwellers. Year-over-year rent for a one-bedroom apartment has decreased by 1.1 percent, or $15, making the median asking rent for this property type $1,295.”
Dwellsy, the largest home rental listing platform in the country, regularly mines its 14+ million residential rental listings for statistics and data. Because Dwellsy allows landlords to post listings free of charge, it has a pool of data that’s more diverse—and more representative of the true rental landscape—than that of pay-to-play listing services. Each month, Dwellsy breaks down this data regionally across the U.S. so renters and landlords can see up-to-date trends in rental housing and current affordability in over 250 markets.
“Especially with the rise of remote and hybrid work, more people than ever enjoy flexibility in where they live,” Bordo says. “This data can impact where—or whether—some renters choose to relocate. While living in a certain area or being near specific amenities is a deciding factor for some, others may choose to move to a lower-cost location that offers larger rentals for less money. For instance, $2,060 will get you a three-bedroom home in Nashville, Tennessee, but you’ll need $2,095 to get a one-bedroom apartment in Los Angeles, California.”
When analyzing rental trends, Bordo and his fellow data-crunchers focus on one-bedroom apartments because they are similar to two-bedroom apartments in terms of inventory but are more price-accessible. Three-bedroom homes are also featured because they are by far the most common rental home type. For a more detailed look at Dwellsy’s rent price analysis methodology, see this article.
Now, let’s dive into the details of how rent varies across U.S. regions.
Cost of Three-Bedroom Single-Family Home Rentals by Region
This property type is dramatically more expensive in Western states like California, Washington, and Oregon. The Southwest and Southeast are tied for second place, while the Midwest takes the prize for lowest costs.
Median asking rent for a three-bedroom SFR in the Western states is nearly a full $1,000 more expensive than a similar property in the Midwest. And while New England has a reputation for a high cost of living, it’s less expensive to rent a three-bedroom home there than it is in the Southern states.
“This was one of the surprises our team encountered when crunching the numbers, since the Southeast is traditionally known for a lower cost of living,” says Bordo. “Dense urban areas in the Northeast like New York, Boston, and Washington, D.C., are well known for their expensive rents, but a closer look reveals that single-family homes in these high-cost areas are relatively rare.
Meanwhile, there are numerous low-cost markets like Buffalo, New York; Pittsburgh, Pennsylvania; and Hartford, Connecticut, that are more oriented toward single-family housing.”
Cost of One-Bedroom Apartments by Region
Again, Western states – particularly California, Washington, and Oregon—are the most expensive, closely followed by the Northeast.
“It’s notable that the West isn’t by itself at the top of the expense pile here; there are several intersections with the Northeast,” says Bordo. “Apartments in the Southwest and Midwest are far less expensive, while the Southeast claims the middle territory.”
Changes in Rent by Region
“It can also be helpful to track how rent is changing in each region,” says Bordo. “This information is interesting for each region individually, as well as in comparison to the others.”
For one-bedroom apartments, the only region that has seen a year-over-year rent increase is the Southwest (i.e., Texas, Arizona, and New Mexico). In contrast, only the Northeast has seen year-over-year increases for three-bedroom SFRs.
“Interestingly, the results are flipped when we look at the greatest rent declines over the past year,” points out Bordo. “The Northeast has seen the price of one-bedroom apartments fall the most, while the Southwest has seen the biggest reduction in rent for three-bedroom homes.”
The following graphs show the percentage change in asking rent for each region since May 2022.
“As you can see, asking rent fluctuates constantly, and regional trends don’t always parallel one another,” says Bordo. “But the bottom line is that rental properties in the West are likely to be the most expensive for the foreseeable future. If you’re hoping to save money or want to get the most bang for your rental buck, consider a move to America’s heartland.”
About Jonas Bordo:
Jonas Bordo is the coauthor, along with Hannah Hildebolt, of the upcoming book Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster. He is the CEO and cofounder of Dwellsy, the free residential rental marketplace that makes it easy to find hard-to-find rentals.
About the Book:
Everything You Need to Know About Renting But Didn’t Know to Ask: All the Insider Dirt to Help You Get the Best Deal and Avoid Disaster (Matt Holt, August 2023, ISBN: 978-1-6377439-2-8, $21.95) is available for pre-order from major online booksellers.
About Dwellsy:
Dwellsy is the renter’s marketplace: a comprehensive residential home rentals marketplace based on the radical concept that true, organic search in a free ecosystem creates more value than the pay-to-play model embraced by all of the current rental listing services.
