Rents have been rising nationwide, squeezing Americans hoping to save for a down payment or to reduce debt. But a new analysis from the Bank of America Institute found that renters in the Sun Belt have felt the worst of it.
Median rent payment growth in Sun Belt cities like Phoenix and Tampa outpaced Western and Northeastern cities by more than 20 percentage points in February, leaders at the Institute said.
Overall, Bank of America customers saw their rents increase by 8% YOY in February.
Growth changed dramatically by geography. Phoenix and Tampa both saw rent costs increase by 26% and 23% YoY respectively in February. These are both record highs.
Cities like Chicago, Washington, D.C., and Boston saw smaller increases. San Francisco saw only 2.5% rent growth.
The Associated Press recently reported that the Northeast and Midwest are losing residents while six of the ten fastest-growing states are in the South. It is estimated that the U.S. population center is on track this decade to take a southern swerve for the first time in history.
“Everybody knows about the low taxes and great weather in these areas, but something else that makes these areas popular is the robust job market recovery after the pandemic,” Nadia Evangelou, senior economist and director of real estate research at NAR, told CBS News. “Not only were their economies able to recover all the jobs that were lost, but there are 5% more jobs now than there were in 2020.”
Job creation has not only enticed workers to move South but also brought an influx of higher-paid jobs in technology and finance that are putting upward pressure on the housing market as well.
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