Rate of rising rent prices in Phoenix could suggest consumer changes
PHOENIX — Rent prices in Phoenix shot up in 2021, standing out even as the rest of the country also saw an increase.
A new report by real estate website Realtor.com found the median cost of rent in Phoenix was $1,800, fairly close to the nationwide median cost of $1,781.
However, the rate of increase shows just how hot the rental market is in Phoenix.
While nationwide rents saw an average increase of 10.1%, Phoenix saw an average increase of 18.8% in 2021.
“Even though $1,800 a month rents in Phoenix are higher, they’re still a relative bargain and that’s one of the things we think is driving people to consider moving to Phoenix,” said Danielle Hale, Realtor.com chief economist.
Not all apartments are created equal, though. Looking at numbers from the end of 2021 can be especially revealing about current trends.
“Studio rents rose the most in December… growing at a 38% pace,” Hale said. “Two bedrooms were [growing slower] at a 28% year-over-year gain.”
These disparities can suggest the ways consumer habits are changing as the COVID-19 pandemic continues, according to Hale.
“The fact that we’re seeing interest in those smaller units pick up as reflected in the rents picking up suggests that things are opening back up and people are more interested in those urban areas,” Hale said.
Since studio apartments are more highly concentrated in urban areas, Hale said that suggests people are also working from home less and going closer to where their jobs are.
What does the future hold for rent in Phoenix? The report by Realtor.com suggests we’ll keep seeing a rise.
“We do expect a gradual slowdown [after a few months]… but slower growth on top of high levels is still going to mean new highs in rent,” Hale said. “So don’t expect to see lower rents any time soon.”