As rent spikes by 35% in some cities, here’s how Utah compares to the rest of the U.S.

An indication advertises a spot for hire in Cottonwood Heights on Sept. 30, 2021.

Jeffrey D. Allred, Deseret Information

Up to now yr, hire in some U.S. cities shot up a staggering 35%, in response to a latest report from Redfin, fueled partly by rising housing costs that compelled potential homebuyers into the rental market, jacking up demand and resulting in increased charges.

Whereas Utah typically leads the U.S. in development and rising housing costs — Ogden, Provo and Salt Lake Metropolis not too long ago made the high 10 listing of the nation’s most overvalued markets — final yr the Beehive State noticed a rise in hire that was aligned with the nationwide common.

Of the ten metro areas within the U.S. that noticed the best year-over-year rise in hire, most are New York Metropolis-adjacent or in Florida, in response to the Redfin report. They have been:

1. Austin, Texas, which noticed a 40% year-over enhance in hire
2. Nassau County, New York, at 35%
3. New York Metropolis, New York, at 35%
4. Newark, New Jersey at 35%
5. New Brunswick, New Jersey at 35%
6. Miami, Florida at 34%
7. West Palm Seashore, Florida, at 34%
8. Fort Lauderdale, Florida, at 34%
9. Jacksonville, Florida, at 31%
10. Portland, Oregon, at 29%

Throughout the nation, hire elevated by about 14% in 2021, in response to Redfin. Most renters within the U.S. are paying $1,877 every month on common.

Housing costs in Utah are loopy — what about hire?

In Utah, most statewide figures level to a ten% to fifteen% enhance in hire throughout 2021, with the Salt Lake Metropolis metro space seeing the biggest bump. Think about this information from CoStar:

• The Salt Lake Metropolis metro space noticed a 17.7% year-over-year enhance in hire
• Provo noticed a 16.2% enhance
• St. George noticed a ten.5% enhance

Simply because these will increase are aligned with the nationwide common doesn’t imply the Beehive State isn’t seeing an unprecedented surge in hire. In accordance with Residence Record, that nationwide enhance throughout 2021 was record-setting.

Specialists say there are just a few causes for the spike — however a nationwide demand that exceeds the provision of rental models is a number one issue.

The demand in Utah is fueled by sizzling housing markets, which in flip pressure many potential consumers to hire as an alternative. Roughly 34% of Utahns are renting.

“It’s by no means been that prime,” stated Paul Smith, govt director of the Utah Residence Affiliation.

Smith stated the rise in hire can be attributed to a 2020 lull.

“Most locations throughout that pandemic yr didn’t elevate hire a lot in any respect. So it is smart that the following yr could be record-breaking,” he stated.

Nationwide, provide chain points and lumber prices make maintaining with the rental demand tough. Residence complexes are additionally struggling to seek out employees amid the labor scarcity.

Why hire in Utah didn’t enhance like different U.S. cities

Smith says one of many causes Utah didn’t see a spike in hire regardless of seeing an increase in housing costs is due to the kind of leases which are frequent within the state. Of the roughly 300,000 rental models in Utah, over 100,000 are single household houses, Smith stated. One other 50,000 are duplexes or triplexes.

That leaves about 150,000 leases which are in buildings or complexes which have a number of models, that are sometimes run by professionals, reasonably than what Smith and others name “mother and pop landlords.”

“They'll deliver up hire slower than the professionals, the place it’s their livelihood they usually have traders and stockholders they usually’ve bought to push costs,” he stated.

Utah can also be rising, including to its rental stock which helps meet the demand. Different communities, like these in Miami or New York Metropolis, lack the bodily house.

“There’s nonetheless extra demand than there's provide. However we aren’t standing nonetheless. We’re including stock,” Smith stated.

Housing specialists, together with Smith, don’t count on hire to drop anytime quickly. One yr or six month leases make sure that charges gained’t go down shortly. And inflation has rendered historic will increase in hire — hovering round 3% to 7% yearly — inadequate.

“Sure, hire will increase are going to proceed,” Smith stated. “They’re not going to be as large as this yr, however simply to maintain up with inflation now they must be not less than 7% or 8%. A 7% or 8% enhance is now flat.”