With inflation hovering around 7%, just about everything costs more than it used to, from groceries to heating oil to cars. Even worse, one of the biggest monthly expenses for millions of people — rent — has seen price increases that far outpace regular inflation.
According to new data from Redfin, the average monthly rent in the United States climbed 14.1% last month compared to a year earlier — the biggest jump in two years. The increase brings the average monthly rent payment in the United States to $1,877 as of December 2021, compared to $1,645 at the end of 2020.
East Coast cities including New York, Miami and Jacksonville have seen especially big spikes (up 30% or more year over year), while Austin, Texas, has been hit the hardest with rent price growth of nearly 40%.
Unfortunately, owning a home doesn’t protect you from the soaring cost of housing: Mortgage payments are rising even faster than rent prices. The median national mortgage payment for homebuyers with a 5% down payment surged 21.6% on a yearly basis in December to $1,553, according to Redfin.
“The growth in mortgage payments has been driven by both climbing prices and climbing mortgage rates,” Redfin Chief Economist Daryl Fairweather said in a statement. “And those rising mortgage costs push more potential homebuyers into renting instead, which pushes up demand and prices for rentals.”
That’s especially true for millennials, many of whom are entering their peak homebuying years but are choosing to rent instead thanks to an extremely competitive housing market. A recent study from RentCafe, a rental listing and research company, found that the share of millennial rental applications earning more than $50,000 per year rose to 43% in 2021 — a huge jump from 28% in 2017.
Which cities have the highest rent increases?
While rent prices are rising nationwide, some cities have seen especially big spikes. Here are the 10 cities where rent is rising the fastest, according to Redfin.
- Austin, Texas: 40%
- Nassau County, New York: 35%
- New York, New York: 35%
- Newark, New Jersey: 35%
- New Brunswick, New Jersey: 35%
- Miami, Florida: 34%
- West Palm Beach, Florida: 34%
- Fort Lauderdale, Florida: 34%
- Jacksonville, Florida: 31%
- Portland, Oregon: 29%
The average rent payment in Austin, which tops the list, is $2,290. Austin has one of the hottest housing markets in the country. The median home price in Austin rose nearly 19% on a yearly basis to $567,000 last month, according to Redfin. Mortgage payments in Austin rose 37.5% over the course of the last year, according to the new report. (Round Rock, Texas — located just outside of Austin — was featured on Money’s 2021 list of the Best Places to Live thanks in part to its booming job market.)
Only one city included in the Redfin study saw rent prices come down in December compared to the year before: Kansas City, Missouri, where rent fell 0.8%.
More from Money:
Frustrated House Hunters Are Giving up on Buying Only to Face an Expensive Rental Market
The Math Is Changing on Whether It’s Better to Buy or Rent a Home
8 Signs It’s Time to Stop Renting and Buy