Where are the most expensive cities to rent in the US?

Rents in Austin, Texas, more than double as highly paid tech workers flood into the state

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The US housing market is going through some strange times.

Even though mortgage interest rates have risen rapidly as the Federal Reserve tries to cool inflation, house prices have continued to rocket.

The median US home price rose by 13.4 per cent from a year earlier to a record high of $416,000 in June, the National Association of Realtors said this week.

Monthly mortgage payments are now as much as 50 per cent more than they were a year ago, meaning that for millions of Americans, dreams of home ownership are harder to realise.

All of this has led to a jump in rental prices in many areas across the country, as would-be buyers remain stuck in an overcrowded rental market.

A recent report by Rent.com said many states had average rents soar over the past year, particularly in the Sun Belt, which comprises the southern US.

Leading the way up is Austin, Texas, the progressive capital of the Lone Star State that has seen an influx of high-paying tech companies setting up shop in recent years.

Rents for one-bedroom dwellings have more than doubled since last year, rising to $3,257 on average a month.

That's the largest jump seen in any city across the US, with the next biggest increase in Jersey City, New Jersey, where the 51.6 per cent increase means a one-bedroom apartment now goes for $4,421 monthly.

New York City is still the priciest place to rent. A one-bed now costs $5,812 on average, up 41 per cent.

Overall though, Rent.com noted, rental prices across America as a whole have generally stabilised and the cost for two-bedroom units have actually decreased by about 13 per cent.

The Dallas suburb of McKinney had prices drop 50 per cent, the biggest decrease reported. Rent there for a one-bedroom is now just $681.

Bloomberg last week reported that rents rose in the US last month at the fastest pace since 1986, helping to spur overall inflation to a fresh four-decade high.

But rent growth may be peaking as affordability concerns mount, and a surge in construction of new units is poised to start adding to the inventory.

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Updated: July 21, 2022, 5:43 AM