States With the Highest Rent
Rents across the country have gone through a period of historical growth in the past two years. According to real estate research firm CoStar Group, rents in the U.S. rose 11.3% last year. In contrast, over the previous five years, gross rents increased by 18.1%.
Rising rent prices are the result of a combination of soaring inflation and a squeeze on inventory. This lack of supply relative to demand comes as the number of people seeking to rent has increased substantially during the pandemic, while the number of available properties has been limited by pandemic-related shortages of building materials and other delays in construction.
To determine the states with the highest rent, 24/7 Wall St. reviewed five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey. The median gross rent across the United States is $1,096, and state values range from as low as $732 in West Virginia to as high as $1,651 in Hawaii.
In many of the states where rent costs are higher, a higher share of housing units are occupied by renters, rather than homeowners. This is largely because these states have expensive housing markets as a whole, meaning residents are priced out of the possibility of owning a home and are forced to rent. Hawaii is the most expensive state in which to rent, with a median gross rent of $1,651. In Hawaii, nearly 40% of housing units are occupied by renters, above the 35.6% U.S. share and the fifth highest share among states.
Generally, the states with the highest rents tend to have higher household incomes. However, even after accounting for those higher incomes, rent in these states is less affordable. In Hawaii and California, which rank first and second on this list, rent as a percentage of state median household income is second and fourth highest, respectively.
Between 2015 and 2020, nationwide median gross rent rose from $928 to $1,096, a $168, or 18.1%, increase. Over that same period, median rent increased in every state. The smallest increase was in Wyoming, where median gross rent increased by $64, or 8.1%. The largest was in Colorado, where rents rose by $333, a 33.2% increase.
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