What's up with rents? Rents up!

In talent mobility, we have sometimes talked about how "renters are people, too" as we look to consider those who are being relocated that are not selling and buying but are moving from one rental market to another. And the pandemic has dramatically impacted the rental situation in so many more markets. Let's take a look at a few things that are impacting mobility programs as it relates to employees who are "renters."

Depending on which rental report you are reading, you might get a slightly different set of data points, but the story will be the same — rents are at an all-time high. In the April 2022 Apartment List National Rent Report, they share that so far this year, rents are growing more slowly than they did in 2021, but faster than the growth we observed in the years immediately preceding the pandemic. But when you tap into the Zumper National Rent Report, they share that through the first three months of the year, 2022’s national rent growth is outpacing 2021’s rent growth. According to them, not only has the median one-bedroom nationally hit an all-time high at $1,400, but it represents a 2.5 percent increase for the year so far, ahead of the 1.9 percent growth at this time last year. 

Here are a few points from these reports to consider:

• Miami experienced the most rent growth of any city in the country in 2021, and as a result, it’s risen on Zumper’s top 10 list (it's No. 4 ahead of San Jose now) of most expensive markets in the country. The median rent there is now $2,500 for a one-bedroom.
• In the San Francisco metro, rents are still 4 percent lower than they were in March 2020, and the neighboring San Jose metro has seen a decline of roughly the same magnitude. Notably, these are the only metros where the median rent is still below pre-pandemic levels. (Apartment List)
• Again, unbelievably, rent in 2022 is rising faster than it did in 2021. That may change, but per Zumper, almost 82 percent of renters in a survey said they planned on moving in 2022. So with this kind of demand, rents are likely to keep rising.
• Apartment List is (maybe) slightly more optimistic. Their national vacancy index is continuing to slowly inch up, indicating a gradual easing of the tight market conditions that have characterized the rental market over the past year. But rents increased this month in 93 of the nation’s 100 largest cities, with Sun Belt markets in Florida and Arizona continuing to see some of the nation’s fastest growth. 

Have a peek at where rents have grown the most to consider which locations are now more challenging than ever for your relocating employees:

Ultimately, it appears that we’re on track for another year of above-average growth. You are probably not surprised too much because at this point, the severity of the U.S. housing situation is pretty well documented and heavily discussed. As Bloomberg points out, "It’s a five-alarm fire marked by record home prices, spiking rents, proliferating homelessness — and more recently, ominous inflation."