Where Rents are Rising Fastest
May 16, 2022
The multifamily rental housing market in Virginia has been very competitive, with rents rising quickly over the past year. Demand for rental housing is reaching new highs as escalating home prices and rising mortgage rates have pushed more people into the rental market. Recent research from the Federal Reserve found that the share of renters who expect to own a home at some point has dropped to an all-time low. A greater number of higher-income renters has put added pressure on rents, sometimes fueling bidding wars and offers over advertised rents.
In the first quarter of 2022, according to data from CoStar, the statewide average rent was up 11.3% in Virginia. This is the third quarter in a row of double-digit rent growth in the commonwealth. In Q1 2022, the average rent in Virginia was $1,546, up from $1,386 during the first quarter of 2020, before the pandemic.
Rents have been rising in markets across Virginia. Since last fall, rents are up fastest in the state’s larger markets, as people are returning to the office and are moving back to more urban communities. In Q1 2022, the average effective rent per square foot was up 13.0% in Northern Virginia, following an 11.6% hike in Q4 2021. In the Richmond metro market, average rents rose 10.7% year-over-year, and the average rent was up 10.4% in the Hampton Roads market.
Mid-sized markets in Virginia have also seen rent growth, with rental demand up strongly in Roanoke and Charlottesville.
While new apartment construction has increased in most markets, it is still not sufficient to keep up with demand. As mortgage rates rise and buyer activity in the for-sale market cools this year, demand for rental housing will continue to be strong, and rents will likely continue to rise faster than home prices in 2022.
You might also like…
Housing Market March Madness: How do Virginia’s College Towns Compare?
By Abel Opoku-Adjei - March 30, 2023
It’s March Madness, one of America’s most entertaining post-season tournaments! This year’s NCAA March Madness has been entirely unpredictable. There were zero perfect bracket predictions across the country… Read More
Virginia Home Prices Climb Despite Slowing Sales
By Robin Spensieri - March 22, 2023
According to the February 2023 Virginia Home Sales Report released by Virginia REALTORS®, there were 6,505 home sales across Virginia in February. This is a 20.3% reduction compared to February… Read More
Collapse of Silicon Valley Bank and Signature Bank: What Happened and How It Impacts Your Business
By Virginia REALTORS® - March 17, 2023
By: Chief Economist Ryan Price & Deputy Chief Economist Sejal Naik Virginia REALTORS® is taking a look at the recent bank failures making headlines across the nation AND… Read More