For renters encountering soaring housing costs in U.S. city centers, decamping to the suburbs no longer offers much of a reprieve.
The price advantage of renting in the suburbs versus downtowns has shrunk by 53% from three years ago, according to a report Wednesday from brokerage Realtor.com. While suburban renters used to save 12% compared to city dwellers in July 2019, they now pay only 5.8% less.
The shift is a blow for apartment hunters already squeezed by escalating costs and few options for relief. The median U.S. rent jumped 12% in July from a year earlier to $1,879, Realtor.com data show, the 17th straight monthly record.
“Whether in a downtown area or suburb, staying put or making a change, renters are stuck between a rock and a hard place when it comes to affordability,” Danielle Hale, Realtor.com’s chief economist, said in the report. “Put simply, renters are feeling it everywhere.”
The suburbs grew in popularity during the pandemic as urbanites who could suddenly work from anywhere fled cramped downtown apartments for more space. With the price differential narrowing, people outside downtown areas now pay about $107 a month less on rent, compared with $175 in 2019.
The trend is starting to turn as bosses call workers back to downtown offices and other renters simply want a return to vibrant city life, Hale said. The cost of renting in urban areas jumped 13% in July, compared with just under 12% in the suburbs. This is a reversal from January 2021, when urban rent fell 2.5% and suburban rent rose 3.9%.
The acceleration of big city rents is most pronounced in major hubs including New York, where bidding wars are proliferating and leasing costs soared 25% from a year earlier. In Chicago, rents increased almost 16%, and in Boston, they climbed 12%.
This article was provided by Bloomberg News.