The average monthly rent price rose 14% year over year in December to $1,877, according to a report by Redfin released on Friday. This is the largest year-over-year increase recorded since Redfin began tracking rent prices in February 2019, however rents rose just 0.3% from November.
The average national monthly mortgage payment for homebuyers also showed the largest increase in Redfin’s records in December, rising 21.6% from a year ago to $1,553. On a year-over-year basis, the rent price increase outpaced mortgage payment increases for new homebuyers in just 16 of the 50 metro areas Redfin surveyed.
The report is based off of data collected from more than 20,000 apartment buildings across the 50 largest metro areas in the U.S. and combined with rental data on all sizes of apartments for rent with home sales data on all residential home sales from public records and the multiple listing service.
“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. Mortgage rate increases are accelerating, which will cause both mortgage payments and rent to grow throughout 2022.”
The top-10 metro areas with the largest increase in rent prices were all up at least 29% year over year. Austin, TX saw the biggest increase with rent prices rising 40%, followed by Nassau County, NY (35%), New York City (35%), Newark, NJ (35%), New Brunswick, NJ (35%), Miami, FL (34%), West Palm Beach, FL (34%), Fort Lauderdale, FL (34%), Jacksonville, FL (31%) and Portland, OR (29%).
The only metro area that saw rents fall in December compared to a year ago was Kansas City, MO, where rent prices dropped 0.8%.
Four metro areas in New York and New Jersey (Nassau County, NY, New Brunswick, NJ, New York, NY and Newark, NJ) tied for the highest average monthly rental price with a price of $3,718. Indianapolis had the lowest average monthly rent with a price of $1,280.