When it comes to rental rates, it’s definitely not 2020 anymore.

Hardly mentioned by President Biden in the State of the Union address: The cost to rent a home is rising at the fastest clip in years, as landlords bounce back from their struggles earlier in the COVID-19 pandemic. For some households, the surge in rent prices will put homeownership even further out of reach.

Perhaps the closest Biden got to talking about the issue: “The pandemic has been punishing. And so many families are living paycheck to paycheck, struggling to keep up with the rising cost of food, gas, housing, and so much more.”

At another point in the address, Biden touched on the ramifications of rising inflation. “With all the bright spots in our economy, record job growth and higher wages, too many families are struggling to keep up with the bills,” he said. “Inflation is robbing them of the gains they might otherwise feel. I get it. That’s why my top priority is getting prices under control.”

Among the president’s priorities with the American Rescue Plan, Biden said he will endeavor to reduce energy and childcare costs for families, and provide more affordable housing. “All of these will lower costs. And under my plan, nobody earning less than $400,000 a year will pay an additional penny in new taxes. Nobody.”

However, unlike other policy proposals, Biden did not devote time in his speech to elaborate on his administration’s plans for reducing the cost of housing.

Making the rent remains a big challenge for millions of Americans. The overall median rent nationwide as of January was $1,789 per month, according to a new report from Realtor.com. That’s a 19.8% increase on the year. January was the eighth consecutive month in which rents rose on an annual basis by more than 10%.

And compared with the price of a two-bedroom home, rental appreciation exceeded home-price growth across every size of rental unit. The median rents for studio apartments rose 21%, while the cost to lease a one- or two-bedroom rental units rose 19.2%. Comparatively, the price to buy a two-bedroom home only increased 11% over the past year.

“U.S. rental markets are more than making up for lost time, with January data showing national rents continued to surge by double-digits over last year—and at a faster pace than for-sale home prices,” Realtor.com chief economist Danielle Hale said in the report. “So much faster, in fact, that even as monthly starter home costs increased in many of the markets that favored buying, rents for a similar-sized unit were 20% higher.”

In many cities, buying a home is more affordable

The Realtor.com report compared the cost to purchase a home with the cost of rent across the 50 largest cities nationwide. In 26 of these locations, buying a home was cheaper than renting. On average, buying a home in these areas was more than 20% cheaper than renting, in terms of the monthly expenses.

The best place to buy, rather than rent, was Birmingham, Ala., where households stood to save more than 44% on their housing costs if they bought a home. Realtor.com calculated the cost to purchase a home in each market by averaging the median list prices for homes of different sizes and assuming that the buyer brought a 7% down payment and had a mortgage charging 3.45% interest. The housing costs also factor in taxes, insurance and homeowners’ association dues.

Overall, most markets where buying was most affordable were “secondary” cities—locations with smaller populations, mostly across the South and Midwest. Other cities where buying was vastly more affordable than renting included Cleveland, Pittsburgh, St. Louis and Detroit.

At the other end of the spectrum, renters are the ones saving money in “Big Tech” cities. Austin, Texas, earned the dubious distinction in Realtor.com’s analysis of being the city where renting was the cheapest compared with buying property. Purchasing a home translated to a 76% higher monthly cost than renting there. Other cities where this was true included New York, San Francisco, San Jose and Seattle.

“For young Americans like Gen Z who may have moved home to save money during COVID, renting in a big tech city offers flexibility and relative affordability even as rents recover in these areas,” Hale said.

Black Americans stand to lose out as rents surge

The homeownership gap between white and Black Americans is growing, even as the overall homeownership rate has seen record increases. A new report from the National Association of Realtors found that the U.S. homeownership rate as of 2020—the most recent year for which data was available—stood at 65.5%, representing a 1.3% increase from the previous year.

But the homeownership rate among Black Americans was only 43.4%, and is still lower than its prior peak of 44.2% back in 2010. Meanwhile, the homeownership rate for Hispanic Americans hit 51.1%, surpassing the 50% mark for the first time on record. Among white Americans, the homeownership rate is above 72%.

“As the gap in homeownership rates for Black and White Americans has widened, it is important to understand the unique challenges that minority home buyers face,” Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors, said in the report.

“Housing affordability and low inventory has made it even more challenging for all buyers to enter into homeownership, but even more so for Black Americans,” Lautz added.

A variety of factors represent roadblocks for Black Americans looking to achieve homeownership. Half of Black Americans who rent spend over 30% of their income on housing—and over a quarter of Black renter households are severely cost-burdened, spending more than half of their monthly income on rent. Comparatively, only 20% of White renter households were severely cost-burdened.

Income is one factor that explains these gaps. Based on median income alone, around 47% of white renter households can qualify to buy a home, according to the Realtors report, versus just 36% of their Black peers.

Additionally, Black households were far more likely to hold student-loan debt. This was true of two in five Black households, versus roughly one in five white households.

“This makes it difficult for Black households to save for a down payment and as a result, they often use their 401(k) or retirement savings to enter homeownership,” Lautz said.

So long as Black families face these and other barriers to homeownership—Black and Hispanic applicants are more likely to be rejected for mortgages than their white neighbors — they will not only be subject to surging rents, but also have fewer opportunities to grow their wealth.

An analysis from title insurance company First American found that the median homeowner has 40 times the wealth of someone who rents their house, underscoring how homeownership remains the primary path toward growing wealth for most Americans.

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