How Much Does It Cost to Rent an Apartment in the US?
Around 35% of households in the US rent, amounting to around 44 million. This means there is a huge number of people who are affected by increases in the costs of rent.
Over the past few years, we have seen rising costs across the board, including for rent. But exactly how much does it cost to rent an apartment in the US, and how does this break down by state? We investigate below.
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What’s the average cost to rent an apartment in the US?
According to Statista, the average cost to rent an apartment in the US in 2023 is $1,343. For a one-bedroom apartment, the average is $1,152 and for a two-bedroom, it’s $1,320.
The average cost to rent an apartment in the US has risen steadily over the past few years. In January 2022, it cost, on average, $1,296 per month to rent an apartment. In January 2021, the average was just $1,100.
How much does it cost to rent an apartment in the US by state?
The most expensive state to rent an apartment in the US is Hawaii. Research shows that the average cost of rent here is $2,312. This makes sense, as Hawaii is the most expensive state in the US for cost of living, including property and rental prices.
Hawaii is followed by California, with an average rent of $2,032 and then the District of Colombia, with an average rent of $1,851. 13 states have an average rent of more than $1,600. These are:
|State||Average Rent of an Apartment in 2022|
|District of Colombia||$1,851|
Only seven states in the US have an average rent of less than $1,000. These are:
|State||Average Rent of an Apartment in 2022|
How much has the average rent of an apartment in the US changed by state?
Some states have seen a much higher increase in the average cost to rent an apartment than others. Research shows that overall, seven states in the US saw the average rent increase more than 20% from 2021 to 2022. Florida saw the biggest increase, with the average rent cost rising 29% from March 2021 to March 2022. Arizona has the next biggest increase at 25% and Nevada has the next, at 21%.
In contrast, the average rent in Florida rose just 2% from March 2020 to March 2021. Arizona and Nevada saw a rent increase of 6% and 7% respectively in the same period.
North Dakota saw the smallest average rent increase from 2021 to 2022, at just 4%. For the previous period, rent had actually decreased 8%. Overall, five states – North Dakota, Iowa, Minnesota, Missouri and Wisconsin – had rent increases from 2021 to 2022 of less than 10%.
Why has rent increased so much in the US?
There are a number of factors that have influenced the rental market in the US and caused prices to increase. The past few years have seen a huge rise in inflation, which has an impact across the board. With landlords having to pay higher interest rates on mortgages, higher fees for maintenance, etc., these costs get passed on to renters through higher rent.
Another issue has been with the supply and demand of rental homes. During the pandemic, many people lived with friends and family. Around 2.5 million households “disappeared” in 2020, as people consolidated their households. Once the pandemic subsided, many people wanted to live on their own – by 2021, around 4.5 million new households were formed. 61% of these were individuals looking to move out on their own, either from sharing a home with roommates or moving out of family homes.
This surge in extra households was unexpected, and there was not enough housing to accommodate them. In addition, there was a trend for people looking for more space. After the pandemic, more people required a home office to work from home, and many people discovered the value of having some outside space in their homes. So, the rental properties that were available and fit the requirements were in very high demand – with little competition, landlords were able to raise rents.
Another reason why rents have increased in the US is due to the barriers to homeownership. High interest rates and low supply of affordable homes mean many people have been priced out of buying their own homes. As such, they have to turn to renting property, adding more pressure on the rental market.
Will rent continue to go up in the US?
While the surge in rent costs from 2021 to 2022 is expected to plateau a little, it’s forecast that rent will still rise through 2024. It’s estimated that rent in the USA will increase 3.9% in 2024, jump to 5% in 2025 and then reduce to a normal growth rate between 4% and 1.5% between 2026 and 2028.
Reduction in housing finance and an increase in construction of new homes in the next five years is believed to help alleviate the huge rent increases. It’s also thought that many people have reached an affordability limit with rent – that is, the majority of people won’t be able to afford rents that are higher than the average. As such, landlords won’t be able to raise rents higher, as they risk not being able to find tenants that can pay the costs.