An increasing number of North -Americans have come to accept that they may not be able to allow the luxury of buying the house of their idyllic dreams at any time, so they choose to rent one.
In recent years, the supply of rental properties in the suburbs that surround many meters has increased, driven by both new constructions and changes in possession, which means that houses once occupied by owners are rented to tenants.
Realtor.com® Senior Economist Jake Krimmel analyzed the data from the latest North -American Community Survey between 2018 and 23, and found that the increase in suburban rents could be seen in meters that saw a boom in the new construction, such as Austin, Tx, Nashville, TN and Denver, as well as in cities with low construction rates, among them Boston, Boston, Filadelphia, among them. and Washington, DC.
Perhaps, surprisingly, rapidly growing meters increased dramatic in the houses occupied by tenants.
The County of Bastrop, TX, located about 30 kilometers from the center of Austin, increased the number of rental properties by almost 50% from 2018 to 2023. During the same period, Williamson’s next county added 46% more of rental houses, followed by the county of Hays with 25% and the county of Travis with 20%.
Brad Pauly, an Austin agent and Pauly Presley’s owner, tells Realtor.com that there are currently more tenants than buyers at the local housing market.
“Due to the discrepancy between what would cost versus to buy, the lease has become a more economically attractive option,” he says.
According to Pauly, there are multiple factors, including high mortgage rates at the high rank of 6%, which keep buyers outside, as well as the proliferation of rental properties that were purchased for this specific purpose during the COVID-19 pandemic years.
In addition, Pauly states that a large number of suburbs of housing had originally planned to sell, but eventually chose to rent their homes in light of the market softening conditions.
Krimmel confirms that housing market analysis reflects what Pauly has been seeing Austin’s first hand.
“In general, suburbs have increased during and after pandemic, largely due to people who want more space and also because the great generation of millennials began to establish and start families,” he says. “With all this demand from the suburbs, we saw a lot of new activity.”
Nashville has seen a similar trend, with the number of rents in Williamson County, increasing 25% in five years. Meanwhile, Rutherford County and Davidson County saw up to 16% and 15%, respectively.
On the east coast, where the rhythm of construction is considerably slower and the increases in rents are completely caused through changes in possession, Washington, DC suburbs, such as Prince George County and Howard County, added between 11% and 12% of rental houses, while areas outside of Boston, including the Norfolk and Middlesex regions, saw the counties of Norfolk, smaller in the unique digits.
“In short, the demand for suburban life has increased and the offer in many markets has met this demand,” says Krimmel. “But even in meters that did not generate much in response to this demand, we still see an increase in suburban rent.”
While most of the new buildings are built so that owners can live themselves, a suburban construction rise also releases existing houses so that investors can buy and rent.
Fed by higher rates of interest that have left the property for many constructions built in rent, it has been increasing, especially in the suburbs of the south and west.
In the United States, approximately 100,000 new rental properties are being developed in all the United States, after a strong year for the industry, which saw a record of 39,000 single -family houses for rent, according to a recent report from Point2home.com, citing March data from the real estate company Yardi Matrix.
“Between the activity of investors, rent and high interest rates, keeping housing buyers for the first time in a participation pattern, the rent has increased to the suburbs,” says Krimmel.
National rents continue with a descending trajectory
Given the overall status of the United States rental market, rental prices have been reduced nationally, and in May marked the 22nd consecutive month of annual decrease, according to the May rental report of Reathtor.com.
The median who requested the rent in the larger 50 meters was $ 1,705 a month, 1.7%or $ 29, year after year, but $ 5 higher than April.
Above all, the typical rent decreased in all categories of size, from studies to two -room units.
Trump administration anti-immigrant policies aimed at international students-including a pause in new student visa interviews and the suspension of foreign student enrollment at prestigious institutions such as Harvard-is expected that rentals will decrease in popular university cities such as Boston, San Jose, Ca and Seattle.
“Because international students are largely renting, the planned decrease in international students’ arrivals could reduce rental demand, increase vacancies, and put down rental pressure on these areas,” says Realtor.com economist Jiayi Xu.
San Jose has the largest share of foreign students, at 12.9%, followed by Miami, with 12.5%, and Boston, with 10.8%.
Although international students are only a small part of all tenants, ranging from 0.2% to 2.1%, they usually live in areas known by innovation with a high concentration of qualified professionals.
“A decrease in the international enrollment of students could weaken the channeling of national talents and even fueled to the industries of great growth and to soften the demand for rent in these markets,” adds Xu.
Doge purge leads to mixed results
In the meantime, the metro markets with high shares of federal workers continued to see the tendencies for divergent rent in May, with rents that increase by 1.3% in Washington, DC, but went by 5.9% to San Diego, after the removal of the staff supervised by the Government Efficiency Department, which was previously headed by Tesla Billiona Musk.
Other areas with a strong presence of federal workers, including Virginia Beach, Va and Oklahoma City, OK, saw that rents dropped by 2.5%and 1%, respectively, while in Baltimore, 0.3%increased.
“These divergent trends show that the conflicting forces of the federal work reductions and the return terms to the officer are some of the various factors that affect the rental market in these areas,” says Xu.
In the meantime, the “ liberation day ” rates by President Donald Trump on imported steel and aluminum could push rent to cities that have recently seen the fastest growth in the permitted multifamily building, which is synonymous with rental properties, with Milwaukee, Oklahoma City, OK, Memphis, TN, Cleveland and Columbus, OH, OH.
In May, before Trump doubled the rates for aluminum and steel from 25%to 50%, four of these meters already saw a modest annual rental decrease, the largest in Memphis, at 3.3%. Only Columbus experienced a slight growth of 0.2%.
“These costs of materials are expected to increase the additional rise on rents, as developers may delay the construction or transmit higher expenses to tenants,” says XU.
Since it takes less than 20 months to complete an apartment building, it may be time before the added rate costs are completely reflected in rents.
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