The Rent Is Now Really Too Damn High

Inflation just hit 7.9% recently, life is starting to get expensive.  Regular Accidental FIRE readers know I constantly scour the internet for online tools that help show the variance of different elements of personal finance based on geography.

It’s a big country, and we’re all free to move.  So knowing where things are cheaper can be hugely beneficial in your financial independence journey.  By now hopefully everybody knows about the big three expenses – housing, transportation, and food are the three biggest costs for most in America.

For many housing means rent.  I’ve done lots of posts about housing, but many of them have been from an ownership perspective. 

Today we’re going to focus on rent costs.

 

Rent Increase Map

Rent prices have increased sharply across America.  Some cities have seen increases of 50% or more in just one year.  Wouldn’t it be nice to have a tool that breaks it all down?  I’ve got you covered. 

More accurately, Rent.com does, I’m just the one who finds these things and brings them to you.  According to Rent.com’s analysis from April 2021 to April 2022 one bedroom rents were up 26.5% and two bedroom rents were up 25.7% nationally. 

When you scroll down a little more you get to the fun stuff, the map.  You should see this.

 

A small button on the upper right of the map allows you to choose either 1 bedroom or 2 bedroom rents.  Simply hover your mouse over a state and a pop-up will appear showing the year-over-year (YOY) increase in rent prices and detailing the actual prices (this may not work on a cell phone).

Amazingly Rhode Island has seen a 195.66% increase in one bedroom rent prices in one year!  The site doesn’t attempt to give a reason but if any readers have an insight into this please leave a comment below. 

South Dakota, Oregon, and New Hampshire also saw huge increases of 100.62%, 83.71%, and 84.41% for one bedroom rents respectively.  Nebraska is the only state that shows a decrease, although there are a handful of states with no data. 

 

Now The Rent’s Too Damn High, For Real

Remember the “rent is too damn high” guy who ran for governor of New York and briefly for president?  Well he’s probably really pissed now. 

Why?  Because the next map on the Rent.com page dives into rent increases in individual urban areas and looks like this.

Again you can choose between one bedroom or two and just hover your cursor over a city to see the data.  Cities such as Oklahoma City and Austin, Texas saw huge one bedroom rent increases.  While Chandler Arizona had a 68.6% YOY increase for two bedroom rent costs. 

Of note, Baltimore and Cleveland both saw an 11.8% decrease in one bedroom rent prices.  And Shreveport Louisiana saw an 18.7% decrease in two bedroom prices.  Other major cities such as Kansas City and Indianapolis saw decreases in both as well. 

But besides some outlier cities in the Upper Midwest, the overall trend is of increasing rent costs.

 

Forecast: Not Good

One simple explanation for increasing rent prices is increasing interest rates and the expectation that they will increase more based on Fed statements.  This has driven up home and mortgage prices which of course drives up rent.  But there are other factors at play, some related to COVID of course.

As this article from the New York Post explains, increasing rent prices might only get worse going forward:

Analysts expect rent costs to keep increasing while other sectors of the economy start to cool down as landlords reap a windfall from the lifting of eviction moratoriums that were enacted at the height of COVID-19 — kicking out old tenants and bringing in new ones at higher rents.

Many benefitted from COVID eviction moratoriums, but it may come back to bite them extra hard with much higher rents now that the moratoriums have been lifted.  And it will affect many other renters who had nothing to do with those moratoriums and who did not need them.

 

Geoarbitrage

So there you have it financial warriors, a great mapping resource that shows the increase in rent costs for both one bedroom and two bedroom rentals by state and city. 

Resources like this are valuable if you are a renter and you want to possibly relocate to a different area.  But if you’re using real estate as a tool in your path to financial independence, tools like this can help you find where rental markets are booming and where you can possibly invest in your next property.

I post lots of tools like this that show various aspects of money and finance from a location perspective.  Check out my Geoarbitrage Resources Page which has tons of great tools to help you find your perfect location no matter what your priorities are.

I hope you find these resources handy and I will continue to expose valuable tools that can help when deciding on a geoarbitrage strategy.

*Of note, the map from Rent.com is updated monthly so if you’re reading this post at a later date than it was posted the data will be different.