SALT LAKE CITY (ABC4) – Buyers looking to purchase a home in Utah know that the real estate market has grown steadily over the past several years.
But this continued rise in real estate costs has also hit renters in many cities across the country.
In a study by Stessa, The researchers took a closer look at the current US rental market. The report looked for the cities with the highest average rent increases across the country.
The study examined data from the US Department of Housing and Urban Development and the US Census Bureau. To find the cities with the highest rent increases, the researchers calculated the percentage change in median rent from 2019 to 2022.
Salt Lake City saw the third-highest increase in rental rates, skyrocketing 24.8% at an average rate of $1,475, a sharp increase from $1,189 in 2019.
The top 10 US cities with the highest rent increases from 2019-2022 are:
The study found that no segment of the rental market was excluded from rising rates – from studio and multi-bedroom apartments to rental apartments.
Data shows that prices for units of all sizes increased by over 10% between 2019 and 2022 for the average unit.
The western US states with the strongest rent increases are Nevada (26.0%), Idaho (24.1%) and Utah (22.2%). States in the southern and central regions also posted gains, although they were generally lower.
“These states have experienced rapid population growth in recent years, helped in part by workers who have left more expensive states such as California and Washington in search of more affordable markets, but have in the process increased costs in their new locations,” the study notes Celebration .
Experts say a variety of factors contributed to the sharp rise. As the US economy recovers from the COVID-19 pandemic, homebuyers and renters face obstacles like inflation hit a 40-year record high along with skyrocketing real estate prices and rising mortgage rates, that have too hit a ten-year high In April.
“The rise in home values and now rising interest rates are making home ownership out of reach for many potential buyers and keeping more people in the rental market,” researchers say.
For those who actually buy homes, developers and builders also face supply chain issues and a tight job market, further compounding the problems.
“Last year saw a dramatic increase in rental prices due to these factors, with a 17% year-on-year increase in February 2021-February 2022 rental costs from February 2021 to February 2022,” the study notes.
Supply and demand are a major obstacle for tenants today, with the study reporting a shortage of around four million units.
“Zoning and density restrictions have made it more difficult to add housing stock in many locations, both for rentals and in the real estate market,” experts say. “With house prices rising, 70% of the growth in the rental market since 2009 has come from higher earners who might otherwise have bought a home.”
Compounding the problem further are high earners who are forced to remain in the rental market. Developers are more likely to meet their needs with luxury apartments, further isolating available middle- or low-income housing.
When ABC4 spoke to Tonya Basset, head of homies Buy-side agent team on whether Utah real estate market is a “bubble,” Basset believes that may not be true of today’s market.
“I don’t think that’s going to happen here in Utah,” says Basset. “Things are so much different now than they were in 2008.” She mentioned that a similar crash would most likely be prevented by tighter lending standards and a dramatic fall in inventories in Utah in subsequent years.
Bassett predicts that a market crash could gradually materialize as interest rates on new home loans slowly rise. When asked about a projected timeline, Basset believes it will take “probably more than a couple of months” and up to a couple of years for the market to slow down and level out.
Whether you’re looking to rent or buy, Basset says unfortunately Utahns will face a “brutal market.”
For the full report on US city rental prices for all size cities, click here: Click here