The cost of renting a home has steadily declined across the country since the highs of the pandemic, but the Midwest continues to see rising prices.
Data from Realtor.com shows that the national median rent has fallen by about 2.3% over the past six months.
But Midwest metros aren't seeing that decline. In fact, the region saw the fastest rent increases of any region over the past six months, according to the data.
Realtor.com research analyst Hannah Jones said the rental affordability typically displayed by the Midwest has turned into a headache.
“The Midwest tends to be more affordable, which increases demand,” Jones said. “But because of that demand coming in, we're seeing faster rent growth.”
Correctly. The Midwest's relatively cheap housing is now acting as a catalyst for rising rents. Jones said it's a big reason the Midwest hasn't seen the small suspension in rental prices that the rest of the country has seen over the past six months.
“When supply is tight and demand is high, that means prices will continue to accelerate,” Jones said.
Tara Raghuveer, founder of the KC Tenants Union, is concerned.
“People are suffering intensely. People are hurting so much and rent is the critical pain point,” he said.
To make matters worse, Jones said high mortgage rates and a still-competitive real estate market are keeping would-be homeowners stuck in the rental market, contributing to higher prices.
Mortgage rates hit a high of 8% in October, a huge shift from the historically low interest rates seen during the pandemic.
Nationally, rental prices have been falling steadily over the past six months. As of December, the median rent for a two-bedroom apartment was $1,923, according to Realtor.com's most recent October rent report. That's $44 lower than when the average peaked in July.
Although regional costs are lower than they are nationally, rent is higher than many Midwesterners are used to.
Realtor.com provided Midwest Newsroom with the average monthly rental prices for two-bedroom apartments in various metro areas across the region.
Omaha, Nebraska was the most expensive, with a median rent of $1,650.
It was followed by Kansas City, Missouri, where the median rent was $1,300. Close behind was St. Louis at $1,283. Des Moines, Iowa, had a median rent of $1,150.
Tragic situation
Carlos Moreno
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KCUR 89.3
“The rent is too high, has been for too long, and is even more extreme than the early years of the pandemic,” Raghuveer said.
Raghuveer also works in Home Warranty campaign, an organization of more than 50 tenant groups in 24 states that support fair housing laws nationwide. He described the situation in Kansas City and the region as “terrible.”
“Rent is the biggest bill for most poor and working-class families every month,” Raghuveer said.
Median rent in the US is still less than the record high reached in the fall of 2022, Raghuveer pointed out. But, he said, renters are still paying far more than they were before the pandemic. In fact, while the national median rent is slowly declining, it still remains $301 higher than the rent was in fall 2019.
Additionally, Raghuveer said the high demand for rental shares has made it easier for landlords and property owners of large companies to raise the rent. He said for some tenants, that can be a slow road to eviction.
Relieving the pain?
Help may be on the way.
Mortgage rates fell in December to 7%. That could prompt some renters to buy homes, freeing up some rental inventory.
According to US Census data, the number of new rental units in the Midwest is steadily increasing. Jones said that by the fall of 2024, the Midwest will have about 9 million rental housing units, 2.3 percent more than in the fall of 2019.
That could help lower prices, Jones said.
“With the housing market as a whole, we don't expect it to suddenly become affordable, but to take some baby steps in that direction,” Jones said.
Raghuveer said new construction doesn't always lead to lower prices — especially in metro areas where developers often focus on providing amenities to attract high-income renters.
However, Raghuveer remains optimistic. He said that as more renters unions pop up nationally, renters are getting more protection, like in Kansas City, Missouri where the city council passed Tenant's Declaration of Rights.
But Raghuveer said change is coming slowly.
“We are on the verge of a real reckoning in this country on rent.” he said. “The fear is that it may take some time for our policymakers to figure it out.”
This story comes from the Midwest Newsroom, an investigative journalism partnership that includes IPR, KCUR 89.3, New Nebraska Public Media, Public Radio St. Louis and NPR.
