These 5 States Have Seen Massive Rent Spikes in Just 5 Years

Sourced By: Yahoo! finance 

The rental market has been steadily becoming more expensive; but, in some locations across the country, the prices have risen much faster. A new GOBankingRates study found that there was a 24.75% rent increase from 2018 to 2023 in the national median rent price.

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But in some states, that figure is almost double.

Indeed, in the last five years, five states have seen massive rent spikes: Arizona, Delaware, Maine, New Hampshire and New Mexico have all experienced a whopping 40% increase.

“The five states, which have seen substantial rent spikes in the past five years, all share a common characteristic: the absence of rent control laws,” said Sipho Simela, CEO and founder of Matrix Rental Solutions. “This key distinction has allowed landlords in these states to swiftly respond to evolving market conditions and fluctuations in demand.”

According to Simela, unlike regions with rent control measures in place, where rent increases are more gradually absorbed into the market, these states have provided landlords with the latitude to adjust rents according to the prevailing market dynamics.

Another factor, Simela said, is that remote work has played the most significant role in the changing market dynamics in these states. During the pandemic, the appeal of these states was significantly heightened by their easy access to beaches, mountains and vast outdoor spaces, he said.

“In summary, the combination of unrestricted rent adjustments — coupled with factors such as population growth, limited housing supply, growing economies, urbanization and the influence of remote work trends — has contributed to the notable rent spikes, particularly in urban areas within these states,” he added.

Arizona

• Average rent in 2018: $1,030

• Average rent in 2023: $1,491

• Increase: 44.8%

According to Justin Albertynas, CEO of RatePunk, the influx of tech companies and startups, especially in cities such as Phoenix and Tempe, has driven demand for housing.

“Arizona is quickly becoming a tech hub,” he said, “and coupled with Arizona’s popularity among retirees and its ever-increasing reputation as a more affordable alternative to California, the housing market has seen considerable upward pressure on rents.”

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