Housing is the single most significant expense for most households in the United States. The average household dedicates 33.1% of its budget to housing costs. When rising costs significantly outpace increased salaries, as they have done for the last few years, families feel the impact.
The average American renter pays $1,326 a month. For those looking to move, prices are even higher. The average asking rent is now $1,900 , with single-family houses averaging $2,018 a month, while a typical apartment costs an $1,659.
The Reasons for Rising Rents
Rising rents are due to a widening gap between demand and supply. First, rising home prices have priced out many would-be buyers, forcing them to remain in the rental market. According to the National Association of Realtors, first-time buyers fell to 26% in November 2021, the lowest rate since 2014. More than nine million buyers have been priced out of the market by the surge in home prices since in 2022. At the same time, more people have been moving out on their own as COVID-19 restrictions ease. According to The Washington Post, "The number of U.S. households grew by 1.48 million last year."
Meanwhile, the nationwide supply of new rental units rose by just 330,000. Supply chain issues, global material shortages, and difficulties in the labor market hamper the ability to build new units to keep up with increased demand. This shortfall only exacerbates longer-term deficits in the U.S. housing market, which, according to Yardi Matrix, is between 2 and 5 million housing units short of its population's needs. The nation is in the midst of a deepening housing crisis.
The result is rising rents in every state in the country.
Rent by State
Most states have seen an increase of at least 10% in rent prices. Florida leads the nation with a 28% increase in average rental costs between 2021 and 2022. Five more states -- Arizona, Tennessee, New York, Nevada, and Utah -- saw an increase of 20% or more statewide. Only Missouri, Iowa, Minnesota, and North Dakota saw rents increase below 10% between 2021 and 2022. When it comes to vacant units, only two states have median asking rents below $1000 a month, while thirteen states have a median asking rent above $2000 a month.
Most Expensive States
Hawaii has the highest average rent in the United States at $2,399 a month. The asking rent for a typical unit in Hawaii is even higher, with vacant units asking $2,850 for new renters. Average rents in Honolulu cost an average of $2,528. Hawaii also has one of the nation's highest median incomes at $80,729 annually.
California has the nation's second-highest rent, costing the average renter $1,844 a month. The average asking price for a vacant unit is $3,000 a month statewide. Prices are notoriously high in the state's most popular metro areas, with six California metros in the country's top ten most expensive markets. San Jose leads the pack with an average asking rent of $3,199 a month for vacant units. The average renter in the area pays $2,432 a month, a sixteen percent increase year over year. San Francisco rents average $2,111 a month, while the asking price on vacant units is $3,157 a month for new tenants. San Diego saw the sharpest increase in average rent costs in the state, with prices 20% higher than in 2021.
The District of Columbia has the nation's third-highest rents, with renters paying an average of $1,785 a month. The average asking price for vacant units sits at $2,174. Notably, most residents in D.C. are renters, with rentals comprising nearly two-thirds of the housing market.
Florida has the nation's sixth-highest overall rents, averaging $1,686 a month. However, the state's metro areas saw the nation's sharpest increases in rental costs, with thirteen of its metro areas seeing an increase in rental costs of 20% or more. Three metros saw average prices increase more than a third, with a 36% increase in the Cape Coral-Fort Myers area and a 41% increase in rents in Sarasota. The Naples-Marco Island metro leads the nation with prices up 44%, from $1,472 in 2021 to $2,113 in 2022. The median asking rent in the area is a staggering $5,000 a month for vacant units.
Here are the 10 states with the highest average rent:
- Hawaii ($2,399)
- District of Columbia ($1,770)
- California ($1,884)
- New Jersey ($1,679)
- Florida ($1,661)
- New York ($1,659)
- Maryland ($1,647)
- Massachusetts ($1,645)
- New Hampshire ($1,586)
- Colorado ($1,534)
Least Expensive States
Rents are the lowest in the central United States. Only nine states have an average rental cost below $1,000.
North Dakota has the nation's lowest average rent, at just $826 a month, a 3% increase from the previous year. Asking rents for a typical unit run $831 a month. Rents in Fargo, the state's largest city, are slightly higher at $878.
Iowa is the nation's second-cheapest rental market, with average rents of $905 a month. This is a 7% increase over prices in 2021, when the average rent was $846. Iowa City, the state's largest metro, has an average asking price of $1,120 a month.
Arkansas has the nation's third-lowest rents, costing an average of $917 a month. Vacant units in the state have an average asking rent of $1,026 a month.
Lake Charles, Louisiana, was the only major metropolitan area to show a decrease in average rent between 2021 and 2022, with prices down 13%. Notably, the region is still recovering from Hurricane Laura, which devestated the area and damaged half of its homes.
Nationwide, housing costs are rising and incomes are slow to keep up. With inflation nearing forty year highs, families continue to feel to the pinch.
Here are the 10 states with the lowest average rent: