Apartment rents are soaring again as the coronavirus pandemic wanes and workers return to cities.
The U.S. median rent hit the highest level in two years in May, increasing by 7.5% over the past two years, according to a report by Realtor.com.
Monthly rents rose 5.5% year-over-year in May to an average of $1,527 across studios, one-bedroom and two-bedroom apartments.
Of the 50 largest metropolitan areas, 43 saw their median rent increase year-over-year in May, up from 40 in April, and 33 in March.
A year after the pandemic prompted people to leave crowded metro areas – encouraged by remote-work policies, or because huge numbers of layoffs forced them into less expensive areas – renters seem to be gravitating back to cities as vaccination rates rise and jobs come back.
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“Young adults are setting out on their own again,” says Danielle Hale, chief economist at Realtor.com.
She noted that incomes are still growing and more people are returning to work.
As home prices hit record highs and become less affordable, the appetite for rentals may rise as would-be buyers opt for leasing, Hale says.
According to the report, Riverside, California, was the metro area with the fastest-growing rent, with the median reaching $2,020 in May, up 19.2% year-over-year. The other metro areas topping the list of fastest-growing rents included Memphis, Tennessee (17.2%); Tampa, Florida (16.9%); Phoenix (17%); and Sacramento, California, (16%).
Before the pandemic, rents in the 50 largest metro areas grew by 3.2% year-over-year.
Rental markets like San Francisco and San Jose, which have seen steep declines, are seeing those declines soften.
San Jose, for instance, increased by 3.7% in the last month.
Many of the rent discounts are about to disappear, and anyone who was hoping to score a less expensive lease in places like San Francisco, San Jose and other major tech centers will soon find those deals gone, Hale says.
"You've probably missed the absolute best time. That was probably a couple of months ago, but I think moving sooner, rather than later, you're likely to be able to lock in a lower price," she says.
She sees rents increasing as the economy reopens.
At the same time, the Sacramento, California, area is seeing a 19% increase in rents compared with two years ago.
That’s because the San Francisco and San Jose metro areas have a high concentration of tech workers. And when they had the chance to work remotely during the pandemic, they took advantage of that flexibility to sign leases in less expensive areas.
For people who did not have to commute but still wanted to stay within an hour and a half of work, Sacramento was attractive.
“They can realize fairly substantial savings, almost a $1,000 a month, by relocating to the Sacramento area,” Hale says.
Swapna Venugopal Ramaswamy is the housing and economy reporter for USA TODAY. Follow her on Twitter @SwapnaVenugopal
This article originally appeared on USA TODAY: Apartment rent increase: 5 metros saw increases of more than 15%