The rise in home prices in the last year has truly been extraordinary. According to the carefully followed S&P Case-Shiller index, prices have risen by 20% nationwide on a monthly basis year over year. In some cities, which include Tampa and Phoenix, the number is over 30%.
Among the reasons for the increase has been low mortgage rates, which have disappeared in the last few months. In 2021, they dropped below 3% for a 30 year fixed rate loan.
People also became more mobile because of the COVID-19 pandemic. Work from home opportunities have been available to millions of Americans who want to relocate.
As prices for homes rose some people turned to renting. As demand for rentals rose, so did rents.
Rent.com recently published a study titled “Cities With the Highest Rent in the U.S.” The authors pointed out “The price of rent increased across the country between 2021 and 2022, but most of the cities with the highest rent are in western or southern states.”
But, the city with the highest rent was not in the south or west. Jersey City, which can be reached from New York City by bridge, tunnel, or ferry, is only minutes from the country’s largest city. The average rent in Jersey City was $5,500 this year. The number was up 66.25% from 2021.
The balance of the cities with monthly rents over $4,000 were almost exclusively in or around America’s largest metro areas. These include Boston, Palo Alto, Hoboken, and Redmond, WA.
One other thing these places have in common is that demand is not likely to fall soon. That means prices won’t either.
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