Outside the governor’s mansion in St. Paul, Minnesota, on Friday, demonstrators, including many students and teachers, pleaded for Gov. Tim Walz to enact an immediate eviction moratorium to help families impacted by U.S. Immigration and Customs Enforcement raids.
Students at the protest were standing up for their classmates.
“I’m at the dual language program at the high school I go to, and all of my classmates are home. They’re hiding. They’re afraid. It’s a really noticeable difference to walk into an empty classroom every day,” Josie, a member of the Sunrise Movement, a political organization, said.
The educators pleaded for Walz to help families that are financially crushed by the ICE raids.
“Rent is due on Sunday, Feb. 1, and a lot of our families have been denied the right to work because of ICE occupation and can’t pay their rent,” Kate Peruoco, an educator, said. “Educators are really concerned about our students and their families in this moment, and the governor is the only one who can call a moratorium on eviction, and so we’re here today to ask him to do that.”
Protesters say many immigrant families are in fear for their lives and can’t go to work, while the breadwinners of some other families have been deported, leaving their loved ones financially strained.
“I had this really heartbreaking conversation. She said, ‘I lost my father, brother and husband overnight,’” Viviana Salazar said. “They all lived together and now she’s left with her three kids in an apartment that was a two-bedroom apartment, and she doesn’t know how she’s going to pay her rent.”
Viviana Salazar is the founder of Nuestra Lucha MN, a nonprofit created to uplift and help those in the Hispanic community. WCCO met her at Colonial Market, a business she often partners with to help provide relief to impacted families.
Through Nuestra Lucha, Salazar is fundraising to help these families.
“Rent is not inexpensive, especially in a city,” Salazar said.
Since launching the fundraising program last week, Salazar says she’s raised more than $25,000 and has received at least 20 applications from those looking for assistance.
Federal regulators are accusing online real estate firm Zillow of paying rival Redfin $100 million to discourage competition in home rental advertising, harming both renters and property managers.
In a lawsuit filed Tuesday in the U.S. District Court for the Eastern District of Virginia, the Federal Trade Commission alleged the companies struck an “unlawful agreement that eliminates Redfin as a competitor” in the market for placing home rental ads on so-called internet listing services, which the agency notes are widely used by consumers.
Zillow and Redfin, which both operate large real estate listing networks, in February agreed that Redfin would stop competing in the ad market for multifamily properties for nine years and help transition its customers to Zillow, the FTC alleged.
“Paying off a competitor to stop competing against you is a violation of federal antitrust laws,” Daniel Guarnera, director of the FTC’s Bureau of Competition, said in a statement. “Zillow paid millions of dollars to eliminate Redfin as an independent competitor in an already concentrated advertising market — one that’s critical for renters, property managers and the health of the overall U.S. housing market.”
In a statement to CBS news, a Zillow spokesperson said the company’s listing agreement with Redfin “benefits both renters and property managers and has expanded renters’ access to multifamily listings across multiple platforms.”
“It is pro-competitive and pro-consumer by connecting property managers to more high-intent renters so they can fill their vacancies and more renters can get home,” the spokesperson added.
A spokesperson for Redfin said the company “strongly disagrees” with the government’s allegations. “Our partnership with Zillow has given Redfin.com visitors access to more rental listings and our advertising customers access to more renters,” the spokesperson said in a statement.
Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at “60 Minutes,” CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.
If the challenge of scraping enough money to buy a home in the U.S. weren’t enough amid painfully high real estate prices, the cost of owning a home is also surging.
The inflation-adjusted median monthly cost of homeownership in 2024 rose to $2,035, up neary 4% from $1,960 in 2023, according to new Census Bureau data. That cost encompasses monthly mortgage and insurance payments, taxes, utilities and other fees.
The main factors behind the increase in homeownership costs: higher mortgage rates, fees and insurance costs.
“Rising insurance premiums and [homeowners association]/condo fees are the behind-the-scenes culprits for this increase outside of the basic increases to mortgage rates and home prices we’ve seen since 2019,” Realtor.com senior economist Joel Berner said in a statement.
The typical condo or HOA fee in 2024 was $135, Census found. The median annual cost for property insurance in 2024 was $1,348.
“It’s not always clear to prospective homebuyers to budget for these costs since they sit on top of the basic principal and interest payments on a home, but these costs are rising and are a significant portion of what homeowners pay every month,” he added.
Millions of homeowners also face rising electricity costs, driven largely by the growing power requirements of artificial intelligence, data centers, electrification and manufacturing.
A recent LendingTree study found that residents in the 50 largest U.S. metro areas spend more than $450 a month on utilities, up 24% from 2019. Costs were highest in Boston, Massachusetts; New York, New York; Providence, Rhode Island; and Philadelphia, Pennsylvania, the personal finance site found.
Highest homeownership costs
Homeowners in the District of the Columbia faced the highest median monthly costs in 2024, at $3,181, according to the Census survey. Others U.S. states with high homeownership costs California, where residents paid over $3,000 a month for the typical home; Hawaii ($2,937); New Jersey ($2,797); and Massachusetts ($2,755).
Renters also face rising costs. In 2024, the median gross rent across the U.S. was $1,487, up 2.7% from $1,448 the previous year, the figures show.
Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.
The Justice Department on Friday filed an antitrust lawsuit against RealPage, a property management software provider, alleging it enabled a collusion among landlords to inflate rents for millions of Americans.
The complaint claims the Richardson, Texas-based company and its competitors engaged in a price-fixing scheme by sharing nonpublic, sensitive information, which RealPage’s algorithmic pricing software used to generate pricing recommendations. The company replaced competition with rent coordination to the detriment of renters across the U.S., according to the suit, monopolizing the market through its revenue management software which was used by landlords to maximize rent costs.
The DOJ is joined by the attorneys general of California, Colorado, Connecticut, Minnesota, North Carolina, Oregon, Tennessee and Washington. The complaint alleges that RealPage violated sections 1 and 2 of the Sherman Act, an antitrust law.
“Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law,” Attorney General Merrick B. Garland said in a statement Friday. “We allege that RealPage’s pricing algorithm enables landlords to share confidential, competitively sensitive information and align their rents. Using software as the sharing mechanism does not immunize this scheme from Sherman Act liability, and the Justice Department will continue to aggressively enforce the antitrust laws and protect the American people from those who violate them.”
Deputy Attorney General Lisa Monaco said RealPage violated a century-old law in a modern way, by using an AI-powered algorithm to coordinate rent prices, “undermining competition and fairness for consumers in the process.”
“Training a machine to break the law is still breaking the law. Today’s action makes clear that we will use all our legal tools to ensure accountability for technology-fueled anticompetitive conduct,” she said in a statement.
RealPage claims the allegations against the company are false, and insists that RealPage customers decide their own rent prices and can reject the algorithm’s recommendations. The company added that it uses data responsibly.
“RealPage’s revenue management software is purposely built to be legally compliant, and we have a history of working constructively with the DOJ to show that,” a spokesperson for the company said in a statement to CBS News.
The lawsuit comes as Americans struggle to afford necessities from housing to groceries, with high housing costs contributing to persistent inflation.
“As Americans struggle to afford housing, RealPage is making it easier for landlords to coordinate to increase rents,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Today, we filed an antitrust suit against RealPage to make housing more affordable for millions of people across the country. Competition – not RealPage – should determine what Americans pay to rent their homes.”
RealPage acknowledged that its product was designed to maximize profits for landlords, according to the suit, by describing it as “driving every possible opportunity to increase price.”
A landlord praised RealPage’s software, saying they liked it because the algorithm “uses proprietary data from other subscribers to suggest rents and term. That’s classic price fixing…”
Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.
MINNEAPOLIS — Too many Minnesota families are struggling to put a roof over their heads. A new report from the State of the State Housing found that median rent jumped by 8% in the last year.
“Housing is a basic human need, everyone needs a place to lay their head at night,” said Minnesota Housing Partnership Executive Director Anne Mavity.
According to the report, half of all renting families pay more than they can afford for housing. It also showed that evictions were up 8% over the previous year. That only adds to this tragic number: Close to 20,000 Minnesotans struggling with homelessness on any given night.
“Across Minnesota we are actually 114,000 units short that are available and affordable to our lowest income community members,” Mavity said.
Mavity says affordable housing means no more than 30% of your household income.
“For the folks who are serving us our coffee in the morning for the folks who are taking care of our kids taking care of my mom right now those essential jobs don’t pay enough to afford an average two-bedroom apartment,” Mavity said.
She says it’s not their fault, the state’s housing system is broken and work is underway to repair it.
“There is a broad spectrum of need and people who are looking for housing and sometimes that supportive housing and you need case management you need support for addiction and sometimes we just need affordable units,” said the Executive Director of the PERIS Foundation Carla Godwin.
Lydia Apartment and Anishinaabe Apartments are examples of how organizations are working to fix the problem.
“The price to build in terms of development is often standing in the way and so we have public and private partners trying to figure out the way forward in those types of situations and try to figure out how to get enough units built, ” Godwin said.
Reg Chapman joined WCCO-TV in May of 2009. He came to WCCO from WNBC-TV in New York City where he covered an array of stories for the station including the Coney Island plane crash, the crane collapse on the city’s east side, 50 shots fired at motorist Sean Bell by New York Police, and a lacrosse team assault at Fairfield High School in Connecticut.
The Biden administration is proposing a new way to keep rents around the U.S. from soaring: limit corporate landlords to annual rent increases of no more than 5%, or else they would lose a major tax break.
The proposal comes as many households across the U.S. struggle to afford rents, which have surged 26% nationally since early 2020, according to a recent report from Harvard’s Joint Center for Housing Studies. Although costs for many items are easing as inflation cools, housing prices remain stubbornly high, rising 5.2% on an annual basis in June.
The idea behind the plan is to push midsize and large landlords to curb rent increases, with the Biden administration blaming them for jacking up rents far beyond their own costs. That has resulted in corporate landlords enjoying “huge profits,” the administration said in a statement.
“Rent is too high and buying a home is out of reach for too many working families and young Americans,” President Joe Biden said in a statement. “Today, I’m sending a clear message to corporate landlords: If you raise rents more than 5%, you should lose valuable tax breaks.”
To be sure, the proposal would need to gain traction in Congress, and such a price cap may not be palatable in the Republican-controlled House and some Democrats also potentially opposed.
But the idea, even if it doesn’t come to fruition, could prove popular with some voters ahead of the November presidential election, especially those who feel pinched by several years of rent increases. The proposal is one of a number of strategies the Biden administration is promoting to improve housing affordability, including a plan introduced in March to create a $10,000 tax credit for first-time home buyers.
How the 5% rent cap would work
The rent cap, which would need to be enacted through legislation, would require large and midsize landlords to either cap annual rent increases to no more than 5%. Those that failed to comply would lose the ability to tap faster depreciation that is available to rental housing owners.
The law would apply only to landlords that own more than 50 units, and the Biden administration said it would cover more than 20 million units across the U.S. That “accounts for roughly half of the rental market” in the U.S., according to National Economic Advisor Lael Brainard, who spoke on a call with reporters about the proposal.
Accelerated depreciation is a tax strategy that allows landlords to front-load costs associated with their properties, such as wear and tear. That’s useful because such write-offs can lead to paper losses that allow landlords to offset income from rent, for example. Residential landlords can depreciate their properties over 27.5 years, compared with 39 years for commercial landlords.
The risk of losing the tax benefit would incentivize landlords to raise the rent less than 5% per year because keeping the depreciation would prove to be a better deal financially, senior administration officials said on the call.
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
Hartford, Connecticut — home to the Mark Twain House, the nation’s oldest active newspaper and several giant insurers — is also where you’ll find the fastest growing rent in the U.S.
Typical rent in the Northeast city, which is $1,871 a month as of July, has skyrocketed 7.8% year over year, according to online real estate brokerage Zillow. The sharp price increase is attributed in part to growing demand for rentals in the area, which many now view as a more affordable housing option to nearby places like New York or Boston with access to big-city employers, Zillow said.
“Commuting into New York City or Boston from places like Hartford or Providence might have been a deterrent before, but in this new age of remote and hybrid work, the savings seem worth it for many renters, even if it means an occasional painful commute,” Skylar Olsen, chief economist at Zillow, said in a statement.
New York City and Boston are among the nation’s most expensive rental markets, with typical rents in those cities eclipsing $3,000, according to the Zillow Observed Rent Index. Median asking rent in Manhattan is $4,400, StreetEasy.com data shows.
Renters drawn to Northeast and Midwest cities
The rental market has been active in recent months as renters are increasingly being drawn to metro areas in the Northeast and Midwest. That trend is driving up rents in those regions.
Rounding out the top five in Zillow’s list of the fastest growing rent markets are:
Cleveland, Ohio, at $1,447 a month — up 7.2% year over year in July
Louisville, Ky., at $1,417 a month — up 6.8%
Providence, R.I., at $2,118 a month — up 6.3%
Milwaukee, Wis., at $1,394 a month — up 5.7%
Rents are soaring nationally now that more Americans have been priced out of the homebuying market, forcing would-be buyers to remain apartment dwellers for perhaps longer than they desire. And as demand for rental housing climbs, so have prices. Today, the typical rent nationwide is $2,054 as of July, up 3.5% from a year ago, according to Zillow.
Conversely, there are a handful of cities nationwide where rents are falling, and they’re mostly in Texas and Florida.
Rents in Florida metro areas, including Jacksonville, Miami, Orlando and Tampa have fallen between roughly 12.5% and 4% year over year in June, according to Redfin. Rents in Austin, Texas, have started to fall as well, the online real estate brokerage said.
“It’s a good time to hunt for bargains if you’re a renter in Florida or Austin,” Redfin Senior Economist Sheharyar Bokhari said in a statement. “With so much supply on the market, renters may be able to get concessions like free parking or discounted rent. But renters in Florida should be aware that landlords are grappling with surging home insurance costs, and they may ultimately ask tenants to foot the bill via higher rents.”
Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
While rents have been easing for the past few months nationwide, prices are still up significantly compared to before the pandemic, largely due to inflation. Providence, Rhode Island, saw one of the highest rent increases in the U.S. last year, and according to researchers, you need a salary of close to $83,000 to afford a two-bedroom apartment there. Nancy Chen reports.
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A growing number of Americans are ending up homeless as soaring rents in recent years squeeze their budgets.
According to a Jan. 25 report from Harvard’s Joint Center for Housing Studies, roughly 653,000 people reported experiencing homelessness in January of 2023, up roughly 12% from the same time a year prior and 48% from 2015. That marks the largest single-year increase in the country’s unhoused population on record, Harvard researchers said.
Homelessness, long a problem in states such as California and Washington, has also increased in historically more affordable parts of the U.S.. Arizona, Ohio, Tennessee and Texas have seen the largest growths in their unsheltered populations due to rising local housing costs.
That alarming jump in people struggling to keep a roof over their head came amid blistering inflation in 2021 and 2022 and as surging rental prices across the U.S. outpaced worker wage gains. Although a range of factors can cause homelessness, high rents and the expiration of pandemic relief last year contributed to the spike in housing insecurity, the researchers found.
“In the first years of the pandemic, renter protections, income supports and housing assistance helped stave off a considerable rise in homelessness. However, many of these protections ended in 2022, at a time when rents were rising rapidly and increasing numbers of migrants were prohibited from working. As a result, the number of people experiencing homelessness jumped by nearly 71,000 in just one year,” according to the report.
Rent in the U.S. has steadily climbed since 2001. In analyzing Census and real estate data, the Harvard researchers found that half of all U.S. households across income levels spent between 30% and 50% of their monthly pay on housing in 2022, defining them as “cost-burdened.” Some 12 million tenants were severely cost-burdened that year, meaning they spent more than half their monthly pay on rent and utilities, up 14% from pre-pandemic levels.
People earning between $45,000 and $74,999 per year took the biggest hit from rising rents — on average, 41% of their paycheck went toward rent and utilities, the Joint Center for Housing Studies said.
Tenants should generally allocate no more than 30% of their income toward rent, according to the U.S. Department of Housing and Urban Development.
Although the rental market is showing signs of cooling, the median rent in the U.S. was $1,964 in December 2023, up 23% from before the pandemic, according to online housing marketplace Rent. By comparison, inflation-adjusted weekly earnings for the median worker rose 1.7% between 2019 and 2023, government data shows.
“Rapidly rising rents, combined with wage losses in the early stages of the pandemic, have underscored the inadequacy of the existing housing safety net, especially in times of crisis,” the Harvard report stated.
Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News’ BizTech Unit and worked on The Associated Press’ web scraping team.
Millions of Americans are getting a measure of relief when it comes to keeping a roof over their head: After skyrocketing during the pandemic, rent is falling nationwide.
According to a new report from apartment marketplace Rent.com, the national median rent for residential properties fell 0.78% in December of 2023 compared to a year ago — the third consecutive month in which rental prices have fallen across the U.S. The median rent countrywide was $1,964 in December, or $90 less than its peak in August 2022, the report shows.
That modest drop-off comes amid a rise in homes for sale, luring buyers who otherwise would’ve rented back into the residential real estate market. That means less competition for renters, who can leverage the softening market to get better deals, Rent Director Kate Terhune told CBS MoneyWatch.
“It’s the year of the renter… they’re being really choosy right now,” she said. “Property managers aren’t able to fill every unit, and those dollars absolutely count, so we’re seeing some concessions being made.”
Over the last year through December, rent fell particularly sharply in Florida, Idaho and Oregon, where rents fell 9.21%, 5.76% and 5.08%, respectively, the report shows. By contrast, rents surged in cities such as Providence, Rhode Island, where prices soared more than 21%; Columbus, Ohio (11.56%); and San Jose, California (9.48%), according to Terhune.
The rent is expected fall further in many cities when new rental units hit the market, putting pressure on landlords to fill vacant units. In another factor that could weigh on rents, the Federal Reserve has projected multiple interest-rate cuts this. That would lead to lower mortgage costs, spurring homes sales while reducing demand for rentals.
To be sure, despite the recent dip, rents remains unaffordable for many Americans. Overall, rents since the pandemic have jumped 23%, adding an extra $371 per month to households’ rent, Rent.com’s data shows. In 2022, roughly half of renters across the U.S. struggled to afford a roof over their head, according to new research from Harvard University’s Joint Center for Housing Studies.
Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News’ BizTech Unit and worked on The Associated Press’ web scraping team.
A landlord in New Orleans gave all her tenants a free month of rent this December to help make the holidays a little easier. Omar Villafranca has the story.
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With the cost of buying a home financially out of reach for most Americans, a growing number of people are choosing to rent a single-family home.
Nearly 2.5 million U.S. households have rented a single-family home in the past 12 months alone, according to an October estimate from the National Rental Home Council.
“It is generally less expensive to rent a home than to buy one, so for most Americans the path to homeownership starts with renting while saving for a down payment,” Yanling Mayer, an economist with real estate research firm CoreLogic, said in a report this week. “However, homeownership is becoming more elusive than ever for many people, as surging rents over the last few years have put an increasing financial burden on budgets.”
The lowest-cost cites for renting a single-family home across the U.S. are in the Midwest and the South. Here are the most most affordable metro areas, along with the median monthly rent, according to CoreLogic.
Cleveland, Ohio ($1,395)
Jacksonville, North Carolina ($1,400)
Oklahoma City, Oklahoma ($1,595)
Fayetteville, North Carolina ($1,600)
St. Louis, Missouri ($1,650)
Detroit, Michigan ($1,750)
Fayetteville, Arkansas ($1,750)
New Orleans ($1,750)
College Station, Texas ($1,785)
Tucson, Arizona ($1,875)
Of the millions of Americans who began renting a single-family home, most said they made the move because they wanted better housing, transferred to the area for a new job, needed cheaper housing or wanted to establish their own household, CoreLogic found.
Fully half of the nation’s renters today live in a single-family home, while the rest live in multifamily buildings such as an apartment complex or condominium, as well as in in mobile homes, according to CoreLogic. Renting a single-family home is the most expensive option of the three, with the median monthly rent tallying $2,600 as of September. Still, renting a place is cheaper than buying a home in most parts of the nation.
Here are the nation’s most expensive metro areas for renting a single-family home as of September, according to CoreLogic:
Los Angeles ($4,750)
San Diego ($4,500)
San Jose ($4,300)
San Francisco ($4,200)
Ventura, California ($3,925)
Riverside, California ($3,250)
Miami ($3,200)
Boston ($3,000)
Bridgeport, Connecticut ($3,000)
New York City ($3,000)
Soaring homeownership costs
The costs of owning a home have skyrocketed in recent years, driven largely by a shortage of properties on the market and, more recently, surging mortgage rates. The typical American household needs an annual income of $115,000 to afford the median priced home across the U.S., which is $40,000 more than what the average household makes, according to Redfin.
The median down payment on a home in September was nearly $61,000, the real estate firm’s data shows. That’s up roughly 15% from a year earlier, the biggest increase since June 2022.
Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
For decades, one of the draws to moving to the suburbs included renting a place for less than what you’d find in the city. But that may not be the case for much longer as the price gap between the two is steadily shrinking.
According to new rental property research from Apartment List, rent increases in suburban areas in the early years of the pandemic outpaced price growths in 28 of the nation’s largest metropolitan areas. In the years since, year-over-year rent declines in core cities have fallen faster than suburban ones, minimizing the price gap in average rent prices between the two areas.
Here’s what led suburban rents to surge during the pandemic and why they’re falling more slowly than rents in the city.
Pandemic-spurred population changes
Millions of Americans fled major cities during the pandemic, either to limit their exposure to COVID-19, to be with family, or to find roomier housing in anticipation of remote work. In 2020 alone, some 4.9 million people left their city dwellings to move to the suburbs or rural areas, according to the Pew Research Center.
The influx of people moving to suburban areas sent demand for rentals skyrocketing, along with prices. Rents in the suburbs increased 27% between March 2020 when the pandemic shutdowns began, compared with 20% increases in urban areas, according to Apartment List’s report. Annual rent growth in the double-digits persisted in 2021 and 2022.
Rents in the suburbs of Atlanta; Detroit; Portland, Oregon; Seattle, Washington; and St. Louis jumped between 15% and 21% during that time period, Apartment List said.
“This means that over the course of the pandemic, suburban rent growth has outpaced core city rent growth by nearly 8 percentage points, the highest it has ever been,” the apartment listing website said in its report. “Most of the gap emerged within the first 12 months of the pandemic, but has widened steadily since then.”
To be sure, rent in the suburbs is still cheaper on average nationally than in cities. In Tennessee for example, rents in suburban areas average $375 per month less those in metro areas. In the state of Iowa, the average rent is $895 a month, compared with Iowa City, its largest metro area, where the average rent is $1,120 a month, data from World Population Review shows.
However, that gap is shrinking. While suburban rents on average were 12% cheaper than city rents in 2019, they were only 5.8% cheaper in 2022, Bloomberg reported.
Another contributing factor to higher rents in suburban areas is soaring home prices. The cost of buying a home has grown out of reach for the typical American as mortgage rates have climbed an average 7.2% and median home prices are north of $400,000. The typical homeowner pays $2,051 for their mortgage payment compared to $1,837 a year ago, the National Association of Realtors reported last month.
Those increased costs mean that Americans who could be shopping for a home are instead being forced to live in a rental property for much longer, which also limits the number of apartments available for rent.
Renting a home is still substantially cheaper than buying one, but rent prices continue to climb. Rent for single-family homes rose 6% year-over-year in June in Boston; Chicago; and Orlando, Florida; 5% in Charlotte, North Carolina and St. Louis; and 4% in San Diego and Honolulu, according to data from real estate analytics firm CoreLogic.
Rent at attached properties like apartment complexes are projected to rise faster this year than single family dwellings, Molly Boesel’s CoreLogic’s principal economist, said in the report.
Americans began their shift to the burbs at a time when the nation had a severe shortage of available rental units. By one measure, the U.S. was short 6.8 million affordable rental homes for low-income Americans, according to a March 2020 report from the National Low Income Housing Coalition. The supply shortage helped generate higher rent in suburban areas that continued to climb between 2020 and 2022.
Construction companies have begun addressing the shortage this year, housing experts said. Construction on roughly a million new apartment complexes began in 2023, an all-time high, according to Apartment List. About 520,000 of those complexes will be available for renters this year and the remaining will come on line in 2024, according to CoStar.
“An important factor driving this downward trend in year-over-year rents is the rising rental supply,” Danielle Hale, chief economist for Realtor.com, said in a rent report last month.
Hale and others say rent increases will continue to cool down once more of the units currently under construction hit the market. They point to data from Realtor.com that shows rent prices have dropped for three months straight between May, June and July when compared to a year ago.
Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.
San Jose, California — Matthew Richmond makes a good living running a successful pest control company in Northern California’s Silicon Valley.
“I’m living the American dream,” the 32-year-old told CBS News.
Richmond can afford to pursue his passion for adventure. If he wants to buy a motorcycle or dirt bike, “I can go write the check and buy it,” he said.
However, what he has not purchased is a home, even though he says he could afford one.
“Somehow, we’ve been led to believe that you have to own a home in order to be living the American dream,” said Ramit Sethi, host of the Netflix series “How to Get Rich.” “And that’s just not true. For a lot of people, renting can actually be a better financial decision.”
A study released last month from Realtor.com found that U.S. median rental prices dropped in May for the first time since the start of the COVID-19 pandemic in 2020.
A May study from Redfin also found buying a home is cheaper than renting in only four U.S. cities: Detroit, Philadelphia, Cleveland and Houston.
Another study released in May by the real estate company Clever Real Estate determined the top 10 U.S. cities where it may be better to rent than buy, taking into consideration current home prices. First on the list was San Jose, followed by San Francisco, Seattle, Denver and Los Angeles.
“We have this idea that if I could rent a place for $2,000 a month, and if I could buy a place for $2,000 a month, I should buy, because I can build equity,” Sethi said.
Sethi said that potential homebuyers need to consider the total cost of a home, including mortgage rates, property insurance and property taxes.
“I call them phantom costs, because they’re mostly invisible to us until they appear,” Sethi said. “I actually add 50% per month to the price of owning. That includes maintenance, including a $20,000 roof repair, eleven years from now, that I don’t even know I have to save for yet.”
An analysis released earlier this year by the apartment listing service RentCafe, using data from the U.S. Census Bureau, found that the number of high-income renters making $150,000 or more jumped 82% between 2015 and 2020, while the number of millionaire renter households tripled during that period.
Sethi told CBS News he could also purchase a home now, but still prefers to rents as well.
“And so I love to talk about why I don’t,” Sethi said. “I have run the numbers carefully living in cities like San Francisco, New York and L.A., and it makes no financial sense for me to buy there.”
If Richmond bought a home in Silicon Valley, his housing expenses would likely double. He said that he is “totally happy” renting at the moment.
“It does not bug me at all,” Richmond said.
“A rich life really is about saying yes to the things you want to spend money on,” Sethi said. “And it could be a house, but for many people, it’s not.”
If you’re looking for a place to rent, prepare to duke it out with eight other people, and as many as 23 in the most competitive U.S. housing markets, a new report found.
As daunting as that figure may seem, it’s actually fallen from the pandemic years, when the typical apartment saw between 11 and 13 applicants, according to RentCafe. The firm analyzed apartment applications from parent company Yardi, which offers property-management software, to come up with these metrics, including how long it takes to rent a vacant flat and how likely renters were to renew their lease.
The country’s hottest rental market, according to RentCafe, is Miami, which sees an average of 24 applicants per apartment, and where vacancies are filed within 33 days — 10 days faster than the national average.
Central and southern Florida, which is seeing new residents move in at a faster rate than it can add housing, figures prominently on the hottest-markets list. Broward County sees 14 applicants per vacancy, Southwest Florida sees 13 and Orlando, 12. In Tampa and Palm Beach County, the figure is 11.
Cities in the Northeast and Midwest also score high on the list, with Northern New Jersey, Chicago, Milwaukee, Omaha and Grand Rapids, Michigan, rounding out the top 10 most competitive markets.
In the Rust Belt, much of the demand for rental properties is driven by local auto and technology companies boosting spending for electric vehicles, batteries or semiconductors, said Doug Ressler, manager of business intelligence at Yardi Matrix. Some smaller cities in the Midwest and South are also preparing for an influx of federal infrastructure dollars, with local business expansion drawing new residents and jobs.
“We see it as a paradigm shift,” he said. “Heretofore, a lot of people would have written off places like Fayetteville, Greenville, El Paso.”
However, robust construction in many parts of the Southeast, Texas and Phoenix is helping keep rental competition down in those areas, Ressler added. And more apartments are coming to market in the near future, meaning renters elsewhere will see relief if they can wait before plunking their money down.
“We’re forecasting, for 2023 alone, over 450,000 new units, and in the next year, 470,000 units,” far above the 300,000 to 400,000 new apartments added in a typical year, Ressler said. “We believe with the new supply coming on board, the [competition] will probably drop.”
Renters across the U.S. are getting some relief as rental prices fall for the first time in two years.
A new study from real estate website Rental.com shows the median rent nationwide fell 0.5% in May from a year ago, the first dip over the trailing 12 months since the pandemic erupted in 2020.
“This is yet another sign that rental-driven inflation is likely behind us, even though we may not see this trend in official measures until next year,” Realtor.com Chief Economist Danielle Hale said in a statement. “Although still modest, a decline in rents combined with cooling inflation and a still-strong job market is definitely welcome news for households.”
The median rent for an apartment with two bedrooms or less was $1,739 in May, down from a high of $1,777 in July of 2022, according to the study.
Still, the cost of renting an apartment remains considerably higher than it was before the pandemic. The typical rent is about 25% higher, or $344, than it was in 2019, the data shows.
Realtor.com calculated U.S. median rent for studio, one-bedroom and two-bedroom apartments across the 50 largest U.S. metropolitan areas.
Rental prices in major cities across the U.S. dropped steeply in 2020 as mostly white-collar workers fled to smaller, less-populated towns. But prices surged in 2021, reversing the trend, as return-to-office orders and school re-openings drew individuals and families back to larger cities.
Rents still rising in Midwest
While the U.S. median rent has dropped, rental prices aren’t trending down in every region. In the Midwest, rents were up 4.5% in May from a year ago, according to Realtor.com. Rents climbed the highest year over year in Columbus, Ohio (9.3%); St. Louis, Missouri (7.7%); and Cincinnati (7.7%).
However, the rate at which rents are climbing has moderated across the U.S. over the past year. While rent growth for single-family homes in April increased an average of 3.7% from a year ago, it was the 12th straight month of declines, according to real estate research firm CoreLogic.
Realtor.com predicts median asking rents will fall 0.9% by year’s end.
“Looking forward, we expect to see a continued, albeit small, year-over-year decline in rental prices throughout the remainder of the year,” Hale said. “Renters may find themselves with more bargaining power and may have better luck finding an affordable unit this year.”
Let’s start with the bad news for U.S. renters: Since the pandemic, rental costs around the country have surged a total of 26%. Now for the good: Rents are finally slowing in earnest, a new analysis shows.
Rent for single-family homes rose an average of 3.7% in April from a year ago, the twelfth straight month of declines, according to real estate research firm CoreLogic.
“Single-family rent growth has slowed for a full year, and overall gains are approaching pre-pandemic rates,” Molly Boesel, principal economist at CoreLogic, said in a statement.
The spike in housing costs since the public health crisis erupted in 2020 has been driven largely by a shortage of affordable housing coupled with unusually strong demand. Soaring rents in recent years have amplified the pain for millions of households also coping with the skyrocketing prices of food and other daily necessities.
Across the U.S., rents are rising the fastest in Charlotte, N.C., climbing nearly 7% in April compared with the same month in 2022, CoreLogic found. Median rent for a 3-bedroom apartment in the city, which has a population of roughly 900,000, now tops $1,900.
The following metro areas round out the top 20 cities with the fastest rental increases in April from a year ago, along with the typical monthly rent for a 3-bedroom place, according to CoreLogic:
Boston, Mass.—6.2%, $3,088
Orlando-Kissimmee-Sanford, Fla.—6%, $2,209
Chicago-Naperville-Arlington Heights, Ill.—5.9%, $2.319
New York/Jersey City/White Plains, N.Y./N.J.—5.7%, $3,068
Want the biggest bang for your buck? For renters with a budget of $1,500 a month, you’ll get at least 1,300 square feet in places like Wichita, Kansas; Toledo, Ohio; Oklahoma City and Tulsa, Oklahoma; and Memphis, Tennessee, according to RentCafe. In pricey cities like Boston, Manhattan and San Francisco, by contrast, $1,500 affords you less than 400 square feet.
If Caleb Simpson approaches you on the street, then you might want to make sure your home is ready for company.
In the past seven months, the TikTok user has gained fame and notoriety for asking strangers how much they pay in rent and if he can tour their homes.
“I saw a street interview on YouTube, and the guy was asking someone, ‘How much do you pay for rent in New York? What’s the most expensive thing in your home?’ And I thought, what if I asked to go inside the home? That’s kind of ridiculous,” Simpson told CBS News about the series’ origin. “On top of that, when I went in someone’s home, I was like, what’s the craziest thing I could do in here? If I hop in their bed, a stranger’s bed, that’s pretty wild. I think people would like that on the internet.”
Simpson’s hunch proved true — he’s amassed over seven million followers thanks to the videos. “How people organize themselves — whether they have roommates or flexible walls, whatever they are doing to make it work — is interesting to observe,” he said. “I think being able to share this information, just how a normal person lives in big cities, has really dropped a vanity wall.”
But not everyone is a fan of letting a stranger into their home. “I’m too introverted for someone to spontaneously come into my apartment,” one user commented under a video. “I’d have a panic attack.”
“I would say most people are on the ‘no’ side of things,” Simpson said of facing rejections. “Because their art hasn’t been hung yet. That’s the main excuse, which is kind of funny.”
The video series comes amid record-high rent prices across New York City and the rest of the country. “It was interesting exploring Manhattan and hearing people say, ‘My rent went up by $1200,’” Simpson told CBS News. “Or, versus going to Brooklyn or Queens, where they’re like, ‘My rent went up $30 or $40.’”
“Get some roommates,” Simpson said when asked about advice he had for renters. “If you’re moving to a big city, maybe move outside of the city. But, I mean, when you move to New York you just have to get here first and figure it out.”
Even as prices are cooling for gasoline, groceries and online goods, housing remains a major factor in the cost-of-living crisis. Two years after the pandemic-driven rental surge began, rents in many major cities show little sign of easing.
In February and March, shelter costs were the biggest driver of month-to-month inflation, representing 60% of all inflation. New York City rents recently hit a new record, reaching an average $4,175 a month even before the summer season gets started.
Today, 40% of renters are rent-burdened, with the cost of keeping a roof over their head squeezing more middle- and even high-income renters.
But it’s not just the rent that’s too damn high. It’s the rental application fee, late fee, pet fee, administrative fee and “convenience fee” for the privilege of paying your rent, according to two reports from watchdog groups.
These “junk fees” foisted on tenants have exploded in recent years, the National Consumer Law Center found. Renters “face a dizzying array of unavoidable fees” which, on top of record-high rents, “render safe and decent rental housing even more out of reach,” the NCLC noted in a March report.
Application fees, utility billing fees and more
Take a common fee — the application fee, which can fall anywhere from $25 to $350, NCLC found. The fee is nominally meant to cover the landlord’s costs of running a tenant screening, but many of the fees run well above the actual cost of a credit check. What’s more, landlords often collect application fees liberally, charging many tenants who will never be eligible for the apartment, advocates in Maryland, Georgia and South Carolina told the NCLC.
Then there are processing and administrative fees, which range from $12 to $25 a month; utility billing fees — which are charged in addition to the actual utility costs — and “insurance fees,” and “high risk” fees, charged to tenants deemed risker because they have lower incomes or credit scores than others.
Some landlords charge “convenience fees” for renters to pay their monthly rent online, while one Texas property owner imposes a $15 a month in-person payment fee to penalize renters who pay in a form besides an online portal.
More profit from fees than rent
The growing use of plug-and-play leases has helped juice these types of fees, one advocate told the NCLC. “The proliferation of extremely long boilerplate leases … has provided cover for large, poorly-managed multifamily apartment complexes to justify charging hundreds of dollars in fees to tenants despite failing to deliver on their own basic promises,” wrote a Louisiana housing advocacy group.
Indeed, many landlords are now raking in higher profits from fees than from actual rent, according to earnings reports collected by Accountable.us, a watchdog group.
AMH, formerly American Homes 4 Rent, grew its portfolio of single-family homes by 8.5% between 2019 and 2021, but its fee revenue grew by two-thirds during this time period, according to the group’s securities filings. Speaking to investors last spring, AMH executive Bryan Smith touted a recently implemented “pet program” and said, “we’re very excited about the opportunities we’re going to have for ancillary revenue,” referring to fees. (AMH did not respond to a request for comment from CBS News on its fee strategy.)
Tricon Residential, which owns 36,000 single-family home rentals, increased its fee revenue by 42% since the pandemic (when many late fees were banned). Last year, COO Kevin Baldridge told investors the company planned to increase that by 30% per renter “as we continue to roll out fees and other ancillary services,” according to earnings transcripts.
Surging profits for landlords
In March of this year, Tricon touted record growth, with profits increasing to 70% from the year before, to about $780 million. Tricon did not answer a request for comment from CBS MoneyWatch.
When fees and rent are combined, the three largest apartment rental companies saw record profits last year, watchdog group Accountable.us noted. Starwood Property Trust, Mid-America Apartment Communities and AvalonBay Communities saw profits of $2.8 billion last year, up $800 million from the year before, which was itself a record.
Meanwhile, the three biggest single-family rental companies — Invitation Homes, AMH and Tricon Residential — enjoyed a $1.5 billion in profits, a $540 million jump from the year before.
The Federal Trade Commission recenty asked for comments on the tenant screening process; the FTC is also mounting a broader crackdown on junk fees as part of its mandate to curtail unfair and deceptive trade practices. Consumer advocacy groups, including the NCLC, Consumer Reports, the National Housing Law Center are pushing for a crackdown on these fees, which they call “exploitative,” “deceptive” and “unconscionable.”
Apartment rental prices have dropped in every major metropolitan region across the U.S. over the past seven months as the largest batch of new housing in almost 40 years hits markets across the country.
After surging for much of the past two years, rents fell every month from last August to January — the first consistent six-month rent price decline in the past six years, according to data estimates from apartment listing website Apartment List.
While that trend briefly reversed this month with rental prices ticking back up slightly, rental prices remain down from where they were last summer.
Rents for new leases have fallen most steeply in some of the U.S.’ largest metropolitan areas within the past half year. Rents in Boston fell 6%, while rents in Las Vegas and Los Angeles dropped roughly 5%, according to Apartment List. In the Boston metro area, the median rent was $2,058, while the median rent in the Las Vegas and Los Angeles metropolitan regions were $1,491 and $1,660, respectively.
The rental price drop follows an explosion in housing demand triggered by the pandemic, when stay-at-home orders and the rise of work-from-home options prompted Americans to spend more time at home and reevaluate their living arrangements. The national median rent shot up 17.6% in 2021 alone, according to Apartment List data.
However, the latest drop rents could signal that housing demand is now moderating. In recent months, layoffs have slammed industries from tech to finance, and prices for basic goods like groceries remain elevated as the cost of living keeps rising. As a result, many would-be renters are reconsidering how much of their salaries they’re willing to allocate toward housing, while others move back in with family members to save money.
The fall in rental prices may also be a result of fresh housing stock hitting the market this year. Nearly 600,000 new units will be listed this year, according to projections from RealPage, a property-management software company. The delivery of new housing is a result of developers’ efforts to cash in on a pandemic boom in rental prices. During the pandemic, the cost of buying a house increased roughly 32% from March 2020 to December 2022, leaving many low and middle-income people with no choice but to rent. And with the Federal Reserve hiking interest rates, mortgage rates have soared, making renting an even more compelling option for those on a budget.
The abundance of rental apartments could also drive prices down in the coming months as an increase in renters’ options could force landlords to price their apartments more competitively.
Among landlords, the competition for renters is already stiff. The number of apartment tenants who renewed their leases fell to 52% last month, the lowest level for January since 2018, according to RealPage. The numbers signal that renters now have more power and choice in where they will live and how much they will pay.
