North Carolina city has US' highest percentage jump in rent

Talk of rent increases in the US usually involves cosmopolitan places such as New York City and San Francisco. But a midsized Southern city has recorded the largest annual percentage increase for a one-bedroom apartment.

Greensboro, North Carolina (population 296,710), notched a 74 percent increase for a one-bedroom apartment to $1,289 a month in July compared with the same month last year, according to leasing website rent.com.

Percentages don't necessarily mean dollars, because a one-bedroom rental in New York City averages $5,760 a month, the highest in the United States, after a rise of 27.7 percent over July 2021.

San Francisco had the fifth-highest average monthly rent at $3,701, but rose a relatively modest 7.45 percent, below the current US inflation rate.

The economy of the "Piedmont Triad", which includes Greensboro, Winston-Salem and High Point, North Carolina, has traditionally been centered around textiles, tobacco and furniture.

In December 2021, Toyota Motor North America announced that it would build a $1.3 billion electric-vehicle battery plant in Greensboro and hire at least 1,750 people. The University of North Carolina at Greensboro and North Carolina A&T State University run a joint research park, the Gateway University Research Park.

Year-over-year, rent increases continue at a steady pace nationwide, blowing past the 30 percent barrier for both one- and two-bedroom apartments. Experts had expected the end of summer to be a period of moderate rental price increases. But prices remain strong, and mortgage rates continue to rise.

Nationwide, one-bedroom apartments rose in July over the previous month by 4.1 percent to $1,770; two-bedrooms rose by 2.8 percent to $2,106.

After Greensboro, the other US cities in the top 10 of the highest increases were Newport News, Virginia (+60.7 percent), Tulsa, Oklahoma (+59.8 percent), Long Beach, California (+48.5 percent), Raleigh, North Carolina (+42.1 percent), Little Rock, Arkansas (+41.8 percent), Lexington, Kentucky (+39.2 percent), Richmond, Virginia (+38.1 percent), Oklahoma City, Oklahoma (+36.5 percent) and Rochester, New York (+34.9 percent).

Some well-known US cities populate the 10 cities that saw the largest decreases in rent.

At the top was St. Louis, Missouri, which was down by 39.4 percent, followed by Fort Lauderdale, Florida (-34.9 percent), Baltimore (-26.9 percent), Glendale, Arizona (-22.1 percent), Anaheim, California (-20.1 percent), Jacksonville, Florida (-13.2 percent), Miami (-12.3 percent), Irvine, California (-9.6 percent), Cleveland (-9.4 percent) and Reno, Nevada (-8.8 percent).

On the single-family home front, relocation hot spot Boise, Idaho, popular with Californians, has seen its red-hot housing market cool, according to The Wall Street Journal.

"Buyers are balking at record prices, and mortgage rates that last month hit a 13-year high," the Journal reported. "Sixty-one percent of listings in the Boise metro area had a price cut in June, the highest rate out of 97 metro areas surveyed, according to brokerage Redfin Corp. Home builders who couldn't keep up with demand last year are cutting back on construction."

Researchers at Florida Atlantic University and Florida International pegged Boise as "the most overvalued housing market in the US" in June with prices 69 percent above the city's long-term trends. Those high prices and loosening COVID-19 restrictions elsewhere have stunted Boise's ability to keep attracting new residents, the report said.

The Idaho Press reported on Sept 6 that "anyone scrolling through Boise homes on real estate sites can see price cut after price cut, some by tens of thousands of dollars. As supply rises and demand for Boise homes cools off, home prices drop. And no one is helped more by price cuts than people looking in the lower section of the market."

A recent report by the National Low Income Housing Coalition found that a worker would need to earn at least $25.82 per hour to afford a small two-bedroom rental home. For a one-bedroom, the wage dips slightly to $21.25 per hour, still well out of reach for the majority of low-wage workers.

"Nearly 60 percent of wage earners cannot afford a modest two-bedroom rental home working one full-time job," the report said. "Eleven of the 25 largest occupations in the US pay a lower median hourly wage than the wage a full-time worker needs to earn to afford a modest one- or two-bedroom apartment at the national average fair market rent."

The wage required to rent a two-bedroom apartment is currently over 3.5 times greater than the federal minimum wage of $7.25. At those rates, the average minimum-wage worker would have to work 96 hours a week to afford a modest two-bedroom rental.

Millennials, those born between 1981 and 1996, are facing wide "rent-wage gaps", meaning how much they need to afford a place to live compared with their current income.

The city with the largest such gap is Santa Cruz, California, at 61.3 percent, far outstripping the No 2 city on the list, Atlantic City, New Jersey, at 39.7 percent, according to filterbuy.com, which used US Census data.

Santa Cruz is located on the northern edge of Monterey Bay and is home to a University of California campus.

Three other California cities rounded out the top five: El Centro, Napa, in the heart of wine country, and Madera.