AMARILLO, Texas (KAMR/KCIT) – Average rent costs in Amarillo rose for the ninth month in a row, a sharp increase headed into October despite prices normally being expected to decline during the fall. Even so, a report from ApartmentList.com argued Amarillo was still more affordable than most large cities in the country.
Amarillo’s average rent increased by 0.8% in the last month, with an increase of 8.3% throughout 2021. In comparison, this time last year rent prices had dropped by -0.2% instead of seeing a rise.
The median one-bedroom apartment’s rent in Amarillo was noted by the report as $727 for the end of September. The median cost for renting a two-bedroom apartment in Amarillo was around $933.
Texas saw a statewide increase in rent of 14.3% over the last year, with Plano being noted in the report as the most expensive of the state’s major cities. Out of the 10 largest Texas cities the report had available data for, Austin had the fastest growth rate at 24%.
Nationally, Apartment Lists’s National Rent Report said that rent prices increased by 2.1% from August to September. An “unprecedented” rate, given that historically the report has never noted a national increase of more than 0.9% in one month. In the last year, nationally these rates rose 15.1%.
Altogether, the report said only five cities throughout the country in which rents have remained below “pre-pandemic” levels.
Why is this happening?
Rent prices don’t exist in a vacuum – many different factors impact who is looking for a home and when, and how many homes are available.
In 2020, rents broadly fell in more conventionally expensive markets while quickly growing in more commonly affordable ones. In 2021, rents prices have risen across the board. Apartment List highlighted five interconnected trends that may help explain the phenomenon:
- More households competing for homes than ever
- Early months of the pandemic saw more people moving in together. In just three months the country saw a loss of nearly 2.5 million housholds, most of which may have been renters who were able to move on short notice such as young adults moving back with family. However this trend was temporary, and now a surge of people looking to create a greater number of households with a shortage of housing to move into could drive up prices.
- Homeownership is becoming less and less affordable
- Most adults in the country view renting as a step toward owning a home, leading the supply of affordable homes for sale often dictates how many people compete for rental homes. For-sale supply and affordability had been worsesing for a few years, but conditions got drastically worse quickly in 2020 when new home construction slowed and people were too wary to sell their homes. 2020 became a seller’s market, according to realtors in Amarillo.
- With fewer homes for sale, people who can afford homes are filling up the rental market while they search for a home to buy that fits their needs and preferences. Meanwhile, people who cannot afford to buy homes are still trying to navigate the rental market with a rising amount of people involved; the high demand and low supply may case prices to spike.
- Search data suggests many renters are actively looking for a new home
- Google Trend data saw an all-time peak for apartment hunting searches through July 2021, after a noticable drop in search interest for apartments to rent during shelter-in-place measures of 2020. A historically-high number of households and a historically-low number of homes has left the rental market incredibly tight.
- Apartment hunters are searching with more and more urgency
- In the face of a highly competitive rental market, people searching on the rental market were doing so with increased urgency. On average, high-urgency movers were described as searching for a new lease to begin in less than 30 days.
- Apartment vacancies are historically low
- As of the summer of 2021, vacancies disappeared quickly and property managers had very little difficulty filling empty units. The inverse relationship between occupancy and price, or supply and demand, saw an opposite relationship to 2020 in which urban centers had trouble filling empty rental units.