Eighteen of the 50 largest U.S. metro areas witnessed rents rise on an annual basis in March, especially in the Northeast and Midwest, where a lack of rental supply is common and owning a home is costly.
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Renters have fared better than homebuyers in recent months as the cost of owning a home continues to remain elevated. But 18 of the 50 largest metros also saw rents rise on an annual basis in March, Realtor.com reported Tuesday.
Chicago saw rents rise the most in March 2024 with a spike of 4.3 percent year over year. That increase made the median monthly rent $1,846, up by $76 from March 2023.
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New York City, Kansas City, Boston and Indianapolis rounded out Realtor.com’s list of metros with the greatest rent increases in March, reflecting a lack of supply in these areas, which is driving rents, Realtor.com economist Jiayi Xu said.
Rental demand also comes out of challenges to homeownership affordability in these markets, Xu added. “The high housing prices in these expensive markets, plus elevated mortgage rates, may force people to stay in rental markets longer” as they put off buying a home, she said, increasing demand for rentals.
Kansas City and Indianapolis remain relatively affordable compared to Chicago, Xu noted. Those cities also have lower unemployment rates, though, which can also drive rental demand and prices.
“For Kansas City and Indianapolis, in addition to affordability, both of them have strong labor markets, with unemployment rates of 3.6 percent and 3.7 percent [respectively] in February,” Xu said.
These are the five metro areas that saw the greatest rent increases in March 2024:
Chicago | Pedro Lastra / Unsplash
1. Chicago, Illinois
Median rent in March: $1,846
Increase year over year: 4.3 percent
New York City | Getty Images
2. New York, New York
Median rent in March: $2,876
Increase year over year: 3.8 percent
Kansas City | Canva Pro Photos
3. Kansas City, Missouri
Median rent in March: $1,340
Increase year over year: 3.4 percent
Boston | Tomasz Szulczewski / Getty Images
4. Boston, Massachusetts
Median rent in March: $3,023
Increase year over year: 3.3 percent
Indianapolis | Josh Hild / Unsplash
Median rent in March: $1,297
Increase year over year: 3.3 percent
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