Housing
US Luxury Apartments Average 40% Higher Rents
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On average in the United States, a luxury apartment rental will cost 39% more than a non-luxury apartment, but there are several U.S. cities where a luxury rental will cost double. That gap has widened from about 37% in the second quarter of 2013.
The data were reported on Tuesday at the RentCafé blog and apply to apartments in large developments of 50 units or more. A luxury apartment falls into the top two segments of the rental market as defined by Yardi Matrix: high net-worth households and high income households that lack the substantial wealth of the high net-worth group.
Over the past 12 months rent increases have moderated in the luxury segment, rising by 4.7% year over year in the second quarter of 2016. In the non-luxury segment, rents have risen 5.8% in the same period.
The average rent in the United States for a luxury apartment is $1,551, compared with $1,117 for non-luxury apartments. The variation across sections of the country is also wide, with luxury rents in the Northeast (average $2,397) costing 2.3 times more than in the South (average $1,142).
Average rents for non-luxury apartments are highest in California at $1,600. Non-luxury rents in the South average $773.
There are seven U.S. cities where the difference between an average luxury rental and a non-luxury rental is at least double:
- Rochester, New York: 128% difference
- South Bend, Indiana: 114% difference
- Cleveland, Ohio: 111% difference
- Ft. Lauderdale, Florida: 104% difference
- West Columbia, South Carolina: 104% difference
- Oakland, California: 101% difference
- St. Louis, Missouri: 100% difference
Among cities with populations greater than 500,000, Detroit posts the largest difference between luxury and non-luxury rental prices (92%), followed by Chicago (83%) and Milwaukee and Memphis, both with a 79% difference.
For the full list of 300 U.S. cities, visit the RentCafé blog.
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