It used to be that folks could dependably find cheap rent in large swaths of the Midwest and the South. But those deals are quickly dissipating.

In most of the country, monthly rents are still rising—although not by nearly as much as they did during the peak of the COVID-19 pandemic housing frenzy. Nationally, rents rose 3.1% year over year in February to $1,716 a month, in the 50 largest metropolitan areas, according to the most recent Realtor.com® report. But rents are rising much faster in some of the country’s more traditionally affordable areas.

Rents surged in places such as Indianapolis, where they rose 11.8%; Oklahoma City, which saw a 10.9% jump; and Birmingham, AL, where there was a 9.4% increase year over year.

“Some of that discount advantage has dissipated from those markets over the past few years,” says George Ratiu, Realtor.com’s senior economist.

(The report looked at studio, one-bedroom, and two-bedroom units listed on Realtor.com in February. Apartments, condos, townhomes, and single-family homes were included.)

Far too many Americans struggle to afford housing costs. And the problem is getting worse, especially in parts of the country where renters can least afford the hike. Elevated housing costs are eating up more of the typical household’s budget. In February, the average household spent 25.3% of their income on rent, up from 24.8% in February of 2022.

That has led many Americans to move, in search of a lower cost of living. The result of new residents moving into more affordable areas is that rents in those places have risen. The fastest rent growth is often in mid-tier, traditionally cheaper metros in the Midwest and South.

Even so, those metros remain more affordable than many coastal areas. Oklahoma City came in first on the list of most affordable areas in February, requiring 17.4% of the median income to swing the median-priced rental of $980 a month.

And the days of double-digit rent growth appear to have subsided.

“We’re seeing rents cooling,” says Ratiu. “I see this as welcome good news for a lot of tenants who have really been between a rock and a hard place.”

Why rents are jumping in New York City

New York City is the exception to the trend of rents rising in cheaper real estate markets. Rents jumped the most in the far-from-affordable metro, to the tune of 12.2% year over year for a median $2,895 a month, much to the dismay of struggling renters.

Early in the pandemic, many people left crowded metros, taking advantage of the option to work from home in sunnier, more spacious, or less costly areas. But that trend has reversed as renters are moving back to the big city, says Jonathan Miller, national real estate appraiser.

No matter where their jobs are headquartered, people “want to be in Manhattan or other parts of the city,” Miller says.

Challenges for would-be homebuyers are also boosting rents. Some people who can’t afford to purchase a home because of higher mortgage interest rates are renting for longer instead. That extra demand is keeping rents high.

“New York is one of those cities that people love being in,” says Nikki Thomas, a New York City real estate broker with Corcoran. “Even though some of our business districts have been hit hard, the other neighborhoods that have all sorts of amenities—like fun restaurants and bars and cute shops—are thriving. New York City will always be a draw.”

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