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• March 2022 marks two years since the onset of the pandemic. It is the eighth month in a row where rent growth has reached double digits for 0-2 bedroom properties (17.0% Y/Y).
• Despite a dip in year-over-year growth rate, the median rent in the 50 largest metros reached a new high, $1,807.
• Studios continue to catch up with faster recent rent growth, but have the slowest growth over the last two years. Rent by size: Studio: $1,483, up 16.9% ($215) year-over-year; 1-bed: $1,659, up 16.3% ($232); 2-bed: $2,008, up 16.4% ($286).

Tech Markets – A Closer Look

• San Francisco, CA and San Jose, CA are the only two tech markets with cheaper rents in smaller units than pre-pandemic levels.Ìý
• Median rents for studios and 1-bedroom units are down by 13.0% and 3.3%, respectively, in San Francisco, CA, compared to two years ago. In San Jose, CA, rents are 2.8% (studio) and 0.6% (1-bedroom) lower than their pre-pandemic levels.Ìý
• Rents for larger units (2-bedroom units) are more robust to the pandemic. San Jose, CA is the only tech metro with cheaper rents than pre-pandemic levels in March 2022.

Rent Growth Slows, but Median Asking Rents Keep Hitting New Highs

It has been two years since the onset of the pandemic. In March 2022, rent growth across the top 50 metros hit 17.0% year-over-year for 0-2 bedroom properties. It is the second time in the past 12 months that the year-over-year rent growth slowed down relative to the previous month. Nevertheless, the rate has remained in the same range since January 2022, indicating the growth rate is holding stable at a high level that is four times as fast as the rate seen just before the pandemic hit in March 2020. In addition, the median asking rent in the largest markets hit another new high, reaching $1,807, which is about 19.3% higher than two years ago.Ìý

Figure 1: Rent YoY Trend Since the Start of the Pandemic

Studio Rents Grow Fastest but Still Have More Room to Catch Up to Larger Units

In March, two-bedroom units kept seeing a strong increase in rents over last year, and their rent is now at the highest level in our data history. The median rent for two bedrooms reached $2,028 nationally, $286 (16.4%) higher than the same time last year and up by $364 (21.9%) compared to two years ago.Ìý

Rent for one-bedroom units grew at the same pace as last month in March, but it still hit a new high in our data history. The median rent for 1-bedroom units reached $1,659, up by $232 (16.3%) compared to last year and 17.9% ($252) higher since March 2020.

Studio units have seen the largest increase in rents for a third month in a row, and the median monthly rent also topped our historical record. In March, studio rents reached $1,483 nationwide, up by $215 (16.9%) year-over-year and $166 (12.6%) higher than it was two years ago. Still, despite the recent catch-up, studio rents have seen the lowest rent growth over the last two years as these smaller, generally more urban apartments saw rent declines until vaccines were widely available.

Table 1: National Rents by Unit Size

Figure 2: National Rent Trend by Unit Size

Tech Markets: Rents for Smaller Units in San Francisco Bay Area Have Not Returned to Pre-Pandemic Levels

One of the major stories throughout the pandemic was the shift in housing preferences toward smaller cities and suburbs where people could enjoy more affordable living environments with more space. The rise of remote work accelerated this migration and contributed to the declining demand for rental housing in urban areas, particularly in tech-heavy metros such as the San Francisco Bay Area. During the first year of the pandemic, nearly all major tech markets saw sharp rent declines. The monthly median rent for 0-2 bedrooms across the tech centers was 6.9% lower than the pre-pandemic levels, whereas the rent across the top 50 metros was 1.9% higher over the same period, suggesting people fled away from tech-heavy regions to other parts of the country (i.e., a shift in rental housing demand). As March 2022 marks two years since the onset of the pandemic, we revisit these tech centers to understand whether the rents are approaching, equaling, or surpassing their pre-pandemic levels.ÌýÌý

Studios in tech markets experienced the biggest rent declines, down 14.3% during the first year of the pandemic. However, after a 2-year recovery, the rents are now surging, up 3.2%, surpassing the pre-pandemic levels. While rents in tech markets have successfully risen out of their covid slump in general, they are still falling behind the national growth rate by 9.4 percentage points, suggesting that renters continue to prefer to live in other, cheaper parts of the country. Specifically, rental prices for studio-sized apartments in Chicago, IL; San Francisco, CA; San Jose, CA; and Washington, DC, are still below their pre-pandemic levels. Rents for studios in Chicago and San Francisco, in particular, remain more than 10% below their pre-pandemic price, and may take longer to recover.Ìý

Rental prices for a median 1-bedroom unit also dropped significantly in high-tech centers during the first year of the pandemic, down 6% between March 2020 and 2021. While median rents in 8 of the 10 tech hubs have rebounded and surpassed their pre-pandemic levels today, they are still 3.3% and 0.6% lower in San Francisco, CA; and San Jose, CA, compared to two years ago.ÌýÌý

The consistent preference for spacious homes has made rents for larger units more robust to the pandemic. Between March 2020 and 2021, the median rents in the tech metros fell by just 0.9%, a much smaller price decline compared to smaller properties (i.e., studios and 1-bedroom units). Nevertheless, tech centers such as San Jose, CA; San Francisco, CA; Boston, MA; and Los Angeles, CA still saw steep rent declines during the first year. Two years after the pandemic, the average median rent in tech centers surpassed pre-pandemic level by 13.9%, and San Jose, CA, was the only market with rent prices lower in March 2022 than in March 2020. ²

Table 2:Ìý Rent Trend by Unit Size-Tech Market

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Rental Data – 50 Largest Metropolitan Areas –March 2022

MethodologyÌý

Rental data as of February for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. We use communities that reliably report data each month within the top 50 largest metropolitan areas. National rents were calculated by averaging the medians of the 50 largest metropolitan areas. Providence, RI’s March 2022 rental data is currently under review. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.

Note: With the release of its February 2022 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting rental listing trends and metrics. The new methodology is expected to yield a cleaner and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better account for cases where new or missing data may not be completely at random. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since March 2022 will not be directly comparable with previous releases (files downloaded before March 2022) and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.

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1. The overall distribution shifts towards larger units drove the higher nationwide YOY growth.
2. ÌýIf 0-2 bedrooms are pooled together, March 2022 is the first month that median rents in San Francisco, CA and San Jose, CA rebounded to their pre-pandemic levels. The rent recovery is driven by the overall distribution shifts towards larger units.