What is the Average Rent Increase in the US?
The average rent increase across the US is expected to be approximately 4.9% in 2024. However, there is a vast disparity between rental markets in different parts of the country.
Should they follow national trends, or focus on what's happening in their local market? We'll explore this issue and offer some insights to help landlords navigate rent increases in 2024.
Rent Increase Across the US (from 2022-23)
- Alabama: Rents went up by 1.86%, which means an extra $180 per year.
- Alaska: Rents rose by 2.83%, adding $408 yearly.
- Arizona: Rent increased by 5.36%, adding $708 per year.
- Arkansas: Rents went up by 2.29%, an extra $204 annually.
- California: Rents spiked by 25.77%, adding $4,992 per year.
- Colorado: Rents increased by 4.46%, which means an extra $732 yearly.
- Connecticut: Rents surged by 20.90%, adding $2,952 per year.
- Delaware: Rents dropped by 26.95%, a decrease of $5,184 annually.
- D.C.: Rents rose by 15.59%, adding $2,088 yearly.
- Florida: Rents increased by 4.2%, adding $624 annually.
- Georgia: Rents decreased by 3.72%, resulting in $468 less per year.
- Hawaii: Rents jumped by 18.72%, adding $3,708 yearly.
- Idaho: Rents went up by 2.61%, an extra $276 annually.
- Illinois: Rents increased by 12.75%, adding $1,560 yearly.
- Indiana: Rents rose by 2.62%, adding $264 annually.
- Iowa: Rents increased by 2.85%, adding $276 yearly.
- Kansas: Rents went up by 1.39%, an extra $144 annually.
- Kentucky: Rents increased by 6.21%, adding $576 per year.
- Louisiana: Rents rose by 7.04%, adding $732 yearly.
- Maine: Rents surged by 27.82%, adding $2,904 per year.
- Maryland: Rents increased by 6.14%, adding $1,032 yearly.
- Massachusetts: Rents spiked by 38.6%, adding $6,300 per year.
- Michigan: Rents increased by 8.56%, adding $912 yearly.
- Minnesota: Rents rose by 11.52%, adding $912 per year.
- Mississippi: Rents increased by 1.8%, adding $168 yearly.
- Missouri: Rents increased by 3.96%, adding $396 yearly.
- Montana: Rents surged by 11.07%, adding $1,104 per year.
- Nebraska: Rents rose by 2.33%, adding $240 annually.
- Nevada: Rents dropped by 2.83%, resulting in $396 less per year.
- New Hampshire: Rents increased by 12.12%, adding $1,668 yearly.
- New Jersey: Rents surged by 20.75%, adding $3,432 per year.
- New Mexico: Rents increased by 5.67%, adding $576 yearly.
- New York: Rents surged by 35.22%, adding $5,532 per year.
- North Carolina: Rents increased by 3.11%, adding $348 yearly.
- North Dakota: Rents rose by 7.46%, adding $720 per year.
- Ohio: Rents increased by 6.4%, adding $624 yearly.
- Oklahoma: Rents increased by 4.05%, adding $396 annually.
- Oregon: Rents rose by 10.3%, adding $1,464 per year.
- Pennsylvania: Rents increased by 9.04%, adding $1,032 yearly.
- Rhode Island: Rents rose by 12.37%, adding $1,548 per year.
- South Carolina: Rents increased by 1.95%, adding $216 yearly.
- South Dakota: Rents rose by 4.55%, adding $420 per year.
- Tennessee: Rents increased by 1.22%, adding $132 yearly.
- Texas: Rents increased by 4.77%, adding $624 per year.
- Utah: Rents dropped by 4.28%, resulting in $564 less per year.
- Vermont: Rents surged by 25.61%, adding $3,012 per year.
- Virginia: Rents increased by 1.2%, adding $180 yearly.
- Washington: Rents rose by 12.14%, adding $1,980 per year.
- West Virginia: Rents rose by 6.05%, adding $528 per year.
- Wisconsin: Rents increased by 7.27%, adding $756 yearly.
- Wyoming: Rents rose by 6.57%, adding $648 per year.
When Can a Landlord Raise Rent?
A landlord's ability to raise rent depends on the type of lease agreement. During a fixed-term lease (like a one-year lease), rent cannot be raised unless the lease itself allows for it or you and the landlord agree.
In month-to-month tenancies, however, rent increases are generally allowed after a certain period, typically with written notice (often 30-60 days depending on location and rent control laws). There may also be limitations on how much rent can be raised in areas with rent control.
When Can a Landlord Not Raise Rent?
There are a few situations where a landlord might be restricted from raising rent:
- During a Fixed-Term Lease: If you have a lease agreement for a set period (e.g., one year), rent typically cannot be increased unless the lease explicitly allows for mid-term increases or you agree to a change.
- Rent Control Laws: Some cities or states have rent control laws that limit how much and how often rent can be raised.
- Retaliatory Increases: It's illegal for a landlord to raise rent in retaliation for a tenant exercising their rights, such as reporting code violations.
- Discriminatory Increases: Rent increases cannot be based on discriminatory factors like race, religion, or familial status.
What Determines Rent Increases?
Several factors influence how much rent a landlord can raise:
- Market Conditions: This is a big one. In areas with high rental demand and low vacancy rates, landlords have more leverage to raise rents significantly. Conversely, in areas with a surplus of rentals, landlords might need to keep rent increases modest to attract tenants.
- Local Rent Control Laws: Some cities and states have rent control ordinances that dictate how much and how often landlords can raise rent. These can significantly limit rent increases, especially for existing tenants.
- Property-Specific Factors: The condition, amenities, and overall desirability of the rental unit itself play a role. Landlords can justify higher increases for recently renovated units, those with desirable features like in-unit laundry, or prime locations.
- Operating Costs: Landlords factor in rising property taxes, insurance premiums, and maintenance costs when considering rent increases. They may raise rents to cover these increased expenses.
- Tenant History: Landlords may be more inclined to keep rent increases minimal for reliable, long-term tenants who pay rent on time and take good care of the property.
How Much Can Rent Be Raised?
Rent increase limits vary by state, so check your local landlord-tenant laws first. About half of landlords plan to raise rent by 5% to 10% annually to offset rising property ownership costs.
Although annual rent hikes are typical, it's crucial to factor in local regulations, seasonal trends, rental comparisons, and market conditions to avoid overcharging. Even if some landlords routinely raise rent by a set percentage, it's wise to assess what's appropriate for your rental property.
When Is a Good Time to Raise Rent?
There's no perfect time for rent increases, but aiming for periods between lease renewals and considering factors like local market trends, rising costs, and tenant history can help. Avoid raising rent right before winter when moving is less desirable, and be mindful of holidays or financially straining times for tenants.
How to Communicate Rent Increases to Tenants?
Deliver rent increase notices well in advance (following required notice periods) in a professional and respectful manner. Clearly explain the new rent amount, effective date, and reason behind the increase (e.g., rising property taxes, market value adjustments). Show appreciation for good tenants and be open to discussing concerns while maintaining a firm stance on the new rate.
Will Rent Go Up or Down in the Future?
According to the Washington Post, rent price increases have slowed down overall but are still growing faster than before the pandemic. However, the rate of increases has begun to cool down. This suggests that although rent prices are still going up, the pace has slowed compared to the immediate post-pandemic period.
The report also mentions that month-over-month asking rents increased by 0.5%, slightly lower than the 0.6% increase observed in the preceding months. These trends indicate that while rents are still relatively high, the rate of increase is starting to stabilize. The significant spikes in rent prices seen over the past few years are likely becoming less common.