Rental Market Tracker: Mortgage Payments Rose Faster Than Rents for the 8th Consecutive Month in September

by Real estate financingMission+
16 minutes read

Rents were up 11%, the fastest annual growth in at least two years; mortgage payments for new homebuyers rose 15%.

Average monthly rents increased 11% nationwide over the past year, the highest growth rate in at least 2 years. The national median monthly mortgage payment for homebuyers went up even faster, climbing 15% since September 2020. This is the eighth consecutive month that growth in median mortgage payments for new homebuyers has outpaced that of rents.

Rents and Homebuyer Mortgage Payments Both Rising Sharply in 2021

Rent price increases outpaced mortgage payments for new homebuyers in 26 of the 50 largest metro areas in the US during September.

Redfin’s rent-versus-own analysis uses data from more than 20,000 apartment buildings across the US. The report combines rental data on all sizes of apartments for rent with home sales data on all residential home sales (single-family, townhouse and condos) from public records and the multiple listing service (MLS). When this report refers to the median mortgage payment for new homebuyers, it is based on a 5% down payment, the median sale price during the month and the average mortgage interest rate for the month. The report uses a 5% down payment in order to be comparable to what an average renter may be able to reasonably achieve in savings.

Rents and Homebuyer Mortgage Payments Both Rising Sharply in 2021

Rents are rising the fastest in Florida

The metro areas with the biggest increases in rent prices were clustered in southern Florida where people have been flocking to escape more expensive metros in the northeast, but some expensive cities like Seattle and New York were also in the top 10. Rents were up the most from a year earlier in Fort Lauderdale, Miami, and West Palm Beach, which all saw rents go up 36%.

“Florida is seeing some of the largest increases in rents thanks to migration from remote workers who previously lived in cities like New York or San Francisco,” said Redfin Chief Economist Daryl Fairweather. “Because out-of-towners typically rent before buying, this migration is likely driving a larger spike in demand for rentals compared to homes for sale. Florida also has some of the highest climate risks in the country from sea-level rise, storms and heat. So renting may be particularly attractive to residents who don’t want to make a long-term bet on the Florida housing market.”

Top 10 Metro Areas With Fastest-Rising Rents

  1. Fort Lauderdale, FL (+36%)
  2. Miami, FL (+36%)
  3. West Palm Beach, FL (+36%)
  4. Tampa, FL (+34%)
  5. Seattle, WA (+27%)
  6. Nassau County, NY (+27%)
  7. New Brunswick, NJ (+27%)
  8. New York, NY (+27%)
  9. Newark, NJ (+27%)
  10. Orlando, FL (+26%)

Only Pittsburgh saw rents decline

  1. Pittsburgh, PA (-1%)

Only one metro area saw a decrease in rent in September compared to a year earlier: Rents fell 1% in Pittsburgh, PA. Rents were flat from a year ago in St. Louis, MO.

Only 15 of the 50 largest metro areas saw rents rise more slowly than the 11% national average, including Chicago (+7%) and San Francisco (+6%). In general housing costs across the board are rising much more dramatically in 2021 than in recent years.

Year-Over-Year Change in Rents and Median Monthly Mortgage Payments for Homebuyers, September 2021

Metro Area Average Rent Year-Over-Year Change in Average Rent Median Monthly Mortgage (5% down) Year-Over-Year Change in Median Monthly Mortgage (5% down) Difference Between Year-Over-Year Percentage Point Change in 5% Down Mortgage Payment & Rent
Anaheim, CA $3,398 13.0% $3,559 15.4% 2 pts
Atlanta, GA $2,031 20.4% $1,305 16.5% -4 pts
Austin, TX $2,187 24.1% $1,787 27.5% 3 pts
Baltimore, MD $2,103 17.2% $1,344 6.4% -11 pts
Boston, MA $3,646 17.3% $2,393 8.2% -9 pts
Charlotte, NC $1,783 11.5% $1,356 16.4% 5 pts
Chicago, IL $2,419 7.4% $1,166 5.9% -2 pts
Cincinnati, OH $1,349 9.1% $949 10.7% 2 pts
Cleveland, OH $1,411 9.2% $747 8.1% -1 pts
Columbus, OH $1,512 9.7% $1,101 13.3% 4 pts
Dallas, TX $1,953 16.1% $1,483 17.3% 1 pts
Denver, CO $2,489 16.3% $2,096 16.6% 0 pts
Detroit, MI $1,480 3.6% $751 15.4% 12 pts
Fort Lauderdale, FL $2,871 36.2% $1,384 14.9% -21 pts
Fort Worth, TX $1,953 16.1% $1,257 20.2% 4 pts
Houston, TX $1,748 10.8% $1,186 14.9% 4 pts
Indianapolis, IN $1,267 9.3% $989 11.3% 2 pts
Jacksonville, FL $1,667 25.1% $1,238 20.5% -5 pts
Kansas City, MO $1,431 1.7% $1,072 4.4% 3 pts
Las Vegas, NV $1,798 24.4% $1,495 19.4% -5 pts
Los Angeles, CA $3,398 13.0% $3,242 12.5% -1 pts
Miami, FL $2,871 36.2% $1,621 15.6% -21 pts
Milwaukee, WI $1,905 19.6% $1,068 10.3% -9 pts
Minneapolis, MN $1,895 6.4% $1,364 10.9% 4 pts
Montgomery County, PA $2,233 12.8% $1,542 8.4% -4 pts
Nashville, TN $1,810 12.0% $1,542 18.5% 6 pts
Nassau County, NY $3,580 26.6% $2,333 12.5% -14 pts
New Brunswick, NJ $3,580 26.6% $1,700 11.5% -15 pts
New York, NY $3,580 26.6% $2,570 13.2% -13 pts
Newark, NJ $3,580 26.6% $1,839 6.8% -20 pts
Oakland, CA $3,445 5.7% $3,737 14.0% 8 pts
Orlando, FL $2,039 26.1% $1,325 18.7% -7 pts
Philadelphia, PA $2,233 12.8% $1,036 7.1% -6 pts
Phoenix, AZ $2,006 22.5% $1,653 26.1% 4 pts
Pittsburgh, PA $1,603 -0.7% $838 5.6% 6 pts
Portland, OR $2,285 23.7% $1,977 11.4% -12 pts
Providence, RI $2,366 13.6% $1,522 15.1% 1 pts
Riverside, CA $2,668 21.0% $1,997 15.7% -5 pts
Sacramento, CA $2,623 21.6% $2,175 16.9% -5 pts
San Antonio, TX $1,259 2.7% $1,186 15.5% 13 pts
San Diego, CA $3,133 14.7% $3,005 15.0% 0 pts
San Francisco, CA $3,445 5.7% $6,089 6.3% 1 pts
San Jose, CA $3,392 5.5% $5,299 12.3% 7 pts
Seattle, WA $2,865 26.7% $2,818 12.4% -14 pts
St. Louis, MO $1,508 0.0% $909 7.7% 8 pts
Tampa, FL $2,090 33.6% $1,265 20.4% -13 pts
Virginia Beach, VA $1,640 14.4% $1,121 5.1% -9 pts
Warren, MI $1,480 3.6% $1,068 8.6% 5 pts
Washington, DC $2,536 11.1% $1,918 6.3% -5 pts
West Palm Beach, FL $2,871 36.2% $1,451 14.8% -21 pts
National $1,839 10.7% $1,498 14.7% 4 pts

Methodology

Redfin analyzed home sales data from the MLS, and public records and rent prices from RentPath, across the 50 largest metro areas in the US. Monthly rental prices in this report are not directly comparable to monthly homebuyer mortgage payments, since the mix of homes available to rent and the mix of homes being purchased differ in location, size and quality of home within each metro area. For example, most of the homes being purchased may be in the less expensive suburbs of the metropolitan area, while the apartments being rented may be closer to the more expensive city core.

It is also important to note that the prices in this report reflect the current costs of new leases and new mortgages during each time period. In other words, the average rent of $3,343 in the Anaheim metro area is not the average of what all renters are paying, but the average cost of apartments that were available for new renters during August 2021. Likewise, the median monthly mortgage payment of $3,570 in Anaheim was only for homes that sold during the month of August 2021, not for all homeowners.

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