Rising Rents Are Hitting American Suburbs Hardest

livemint.com:

America’s suburbs are posting the country’s fastest-rising rents, a sign that the recent migration of families from major cities is starting to look more long-term. Many white-collar workers with remote jobs moved out of city apartments for roomier accommodations during the early months of the pandemic in 2020. Now, high mortgage rates and home prices are keeping some of the same families renting for longer periods.

A rise in crime and homelessness in several big cities has some renters looking to the suburbs. The trend is propping up rents and fueling concerns about rental affordability in suburban areas, leading some governments to pass new rent-control measures in response. Rents in suburbs had climbed 26% through this past July since March 2020, 8 percentage points higher than the gain in urban cores, according to a report from rentals website Apartment List.

Suburban rent growth was greater than its urban counterpart in 28 of the 33 metro areas studied, the company said. “In 2019, we were talking about a decade of urbanization," said Igor Popov, Apartment List’s chief economist. “That is no longer the case." The widest rent gap was in Portland, Ore., which lost nearly 3% of its population between 2020 and 2022.

Rents in Portland’s suburbs are up 23% since 2020, compared with about 2% in the center city. Moves to the suburbs have continued despite a historically difficult for-sale housing market. The number of existing-home sales in July shrunk to its lowest level for that month since 2010, and prospective buyers continue to struggle with 7% mortgage interest rates and sale prices that remain near record highs.