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Rent prices are skyrocketing in these 5 metros. What to know before moving

Los Angeles

Ron_Thomas | Getty Images

As rising interest rates and rising property values ​​prevent more families from buying a home, demand for rentals has skyrocketed, with the highest rental prices in the sunniest states.

According to a new report from national real estate brokerage HouseCanary, rental prices for single-family homes rose in the first half of 2022, reaching a national average of $2,495 — a 13.4% increase compared to the same period in 2021.

While cities in warm climates like California and Florida dominate the list of highest average rent prices, the report found that Midwestern states like Ohio earned the top spots for more affordable rents.

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The findings come as more Americans, including some six-figure earners, are living paycheck to paycheck amid rising costs.

Annual inflation jumped 9.1% in June, the fastest growth since late 1981, according to the US Labor Department.

5 US metros with the most expensive monthly rents

These US metropolitan real estate markets had the highest median single-family monthly rents in the first half of 2022:

  1. Los Angeles; Long Beach, California; Anaheim, California: $4,664
  2. San Diego; Carlsbad, California: $4,617
  3. Bridgeport, Connecticut; Stamford, Connecticut; Norwalk, Connecticut: $4,352
  4. San Jose, California; Sunnyvale, California; Santa Clara, California: $4,294
  5. Oxnard, California; Thousand Oaks, California; Ventura, California: $4,259

5 US metros with the least expensive monthly rents

These US metropolitan real estate markets have the cheapest median single-family monthly rents in the first half of 2022.

  1. Mobile, Alabama: $1,419
  2. Dayton, Ohio; Kettering, Ohio: $1,412
  3. Wichita, Kansas: $1,397
  4. Akron, Ohio: $1,361
  5. Canton, Ohio; Massillon, Ohio: $1,314

Remote work may dampen wage growth

The pandemic accelerated the trend of leaving expensive coastal cities for more affordable areas as more Americans moved to remote work.

And a record number of U.S. homebuyers are still looking at cheaper options from cities like San Francisco, Los Angeles and New York, according to a July report from Redfin. However, remote work can come with a hidden cost.

While many enjoy the benefits of remote work, research shows that it can stifle wage growth over time, according to a working paper published by the National Bureau of Economic Research.

There may be other ‘hidden’ costs of moving

While moving to a cheaper area can cut your rent or mortgage, other unexpected expenses can hurt your budget, experts say.

“Losing your network or your village is a huge hidden cost,” said certified financial planner Bill Parrott, president and CEO of Parrott Wealth Management in Austin, Texas.

Losing your network or your village is a huge hidden cost.

Bill Parrott

President and CEO of Parrott Wealth Management

Without access to friends and family, the costs of childcare, pet sitting and more can quickly add up, she said.

And travel from a smaller city can be more expensive depending on your airport or transportation options, said Caleb Pepperday, CFP and wealth advisor at JFS Wealth Advisors, based in Pittsburgh.

“It’s best to research some of these costs before moving to a new city to help make your decision,” he said.

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