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- Rents skyrocketed after the pandemic, and they’re not showing any signs of slowing down.
- Now, consumers are either moving to different states or downgrading their apartments to save money.
- Bank of America shares the top eight cities people are moving to for cheaper rent.
It’s one of your biggest monthly expenses, and it’s only increasing every year.
A recent Redfin report found that the median rent in the US is now $1,634 — up 20% from pre-pandemic times. Rents have gone up significantly in just the last year, too. According to Consumer Price Index data, you’re paying almost 5% more to rent the same apartment compared to this time a year ago.
The rent hikes are driving people to move to cheaper areas, according to Bank of America. In an October 30 client note, the bank found that based on its deposit data, the average consumer’s rent payment increased 3.7% year over year in September 2024. That discrepancy between Bank of America’s data and the official rate of rent inflation indicates that people are moving to find more affordable rent instead of staying put, the bank said.
Consumers are either moving away from high-cost-of-living areas or downgrading within the same city to save money. Renters make up around 34% of all US households and are disproportionately younger and lower-income consumers, meaning that they’re more price-sensitive.
This isn’t a new trend — the pandemic led to many people moving to places with cheaper rent as remote work became normalized. Now, persistent rent increases are pushing consumers to continue moving in search of lower housing costs.
Bank of America analyzed the number of address changes among its customer base to track migration trends. The bank found that areas of the West and Northeast are seeing an especially big exodus of consumers, with rental inflation in the Northeast rising the fastest. New York, Boston, San Francisco, San Jose, and Los Angeles are seeing the biggest net outflows of residents as many consumers are being priced out.
On the contrary, people moving to Southern states saw only a 2% increase in new rents, below the rate of inflation. The Midwest was also a popular destination for consumers moving across state lines, as rents there are relatively low compared to the rest of the country.
Bank of America identified eight cities where people are moving to for cheaper rent below the national average, indicated by a net positive population inflow in Q3 2024. Included also is the median asking rent for September 2024, provided by Redfin.