West Region Records Nation’s Slowest Apartment Rent Growth Since Pandemic
Since the global pandemic, apartment rents in the West region have grown at the slowest rate in the nation. Meanwhile, rents in the nation’s three other regions – the South, Midwest and Northeast – have all grown effective rents at a rate faster than the national norm. In turn, average effective rents in the West region now run below that of the Northeast for the first time since mid-2015.
Over the last four years, rents in the West have climbed from an average rate of $1,831 in February 2020 to $2,204 in February 2024 – an increase of about 20%, according to data from RealPage Market Analytics. That is by far the slowest rate of growth nationwide. Meanwhile, rents in the South, Midwest and Northeast have climbed approximately 29% since February 2020. Nationwide, apartment rents have climbed 25.5% in the four-year period since February 2020 to stand at an average rate of $1,806 as of February 2024.
Typically, the rents in the West region run ahead of the Northeast, South and Midwest – in that order. However, in November 2023, rents in the Northeast inched past the West to become the priciest region in the country for apartment rents. That pattern has held since November and, as of February 2024, average rents in the Northeast ($2,221) outpaced the West ($2,204) by about $17. Meanwhile, rents in the South ($1,586) and Midwest ($1,408) regions remained below the U.S. norm ($1,806), which is typical.
As the apartment industry rebalances from the extreme price hikes seen in 2021 and 2022, rent change has slowed in the West and especially the South. In the year-ending February, rents contracted 1.2% across the South and 0.4% in the West. Conversely, rents continued to grow on an annual basis in the Midwest (2.8%) and Northeast (2.7%), above the national norm of a mere 0.2%.
Despite the Northeast now reigning as the priciest apartment region in the nation, the West region still claims the top spot for rent per square foot – as well as the smallest average unit size.
Across the West region, the average apartment unit is about 871 square feet, which is a cumulative average of all unit types (such as efficiency units or two-bedroom units). Rents per square foot (RPSF) across the West clocked in at $2.53 as of February 2024 – the highest rate in the nation among regions. The Northeast wasn’t far behind with RPSF of $2.44 as of February. Average unit size in the Northeast is about 911 square feet. Both of those RPSF measurements come in quite a bit below the regional norms in the Midwest ($1.55) and South ($1.70). Nationwide, average RPSF sat just under $2.00 as of February 2024 with an average unit size of about 909 square feet.
