Rent growth over last two years far exceeds growth in salaries
■ By Chris Salviati / Contributed
In a new report, rent growth rates from 2015 to 2018 in Hemet have increased, but the rate of increase has slowed recently. When searching for a new place to call home, it’s important to know what’s happening with rent prices in your city.
Year-over-year rent growth in Hemet currently stands at 3.6 percent, down from 8.2 percent in 2017. For comparison, Hemet experienced year-over-year growth of 7.5 percent in 2016 and 5.1 percent in 2015. Nationally, year-over-year rent growth has slowed from 3.6 percent in 2015 to a current rate of 1.5 percent.
For example, in 2015 the median rent for a two bedroom apartment in Hemet was $1,008. In 2016 it was $1,083; in 2017 it went up to $1,172; finally in 2018, the median for a two bedroom was raised to $1,215. In the span of three years, the median rent has increased over $200, but the rise in recent years (2017-2018) was minimal by only $43.
This slowdown in national rent growth is partially attributable to an increasing supply of new rental inventory in many markets. This year’s modest growth rate of 1.5 percent is lagging both wage growth (2.7 percent) and overall inflation (2.5 percent). This is a welcome sign of relief for renters, many of whom are still struggling with affordability.
Our estimates show that annual rent growth rates at the national level have been trending downward for the past few years. Note, however, that although rent growth has slowed, it remains in positive territory. Rents are still increasing, just at a slower pace.
From June 2014 through June 2015, the national median rent increased at a fairly rapid pace of 3.6 percent. However, rent growth slowed in each of the three subsequent years, and national year-over-year rent growth currently stands at a modest rate of 1.5 percent, less than half the rate from 2015. This national trend is mirrored in many of the nation’s largest cities, although some areas have seen growth rates increase.
Chris Salviati is a housing economist with Apartment List.com.