(Robert Davis) – The Las Vegas metropolitan area saw the second-highest year-over-year rent growth in the country last month, according to new research from Zillow.
Zillow’s Observed Rent Index (ZORI), which measures rental appreciation over time, shows that rent in Las Vegas has gone up by 22.6% and currently sits at $1,662 per month. The only metro area to outgrow Las Vegas was Phoenix, Ariz., which saw a 23.1% increase.
The average rent in Las Vegas is also 18% higher than previous projections, ZORI said. Analysts previously expected rent to increase by 4.7% given the metro area’s pre-pandemic trends.
Across the country, rent has continued to build momentum since March with the average rent rising to $1,843 in July, ZORI found. Zillow estimates that the average rent is now $52 higher than if the pandemic had never happened.
“With the economy continuing to reopen, employees receiving more long-term guidance on remote work, and as students find their way back to college campuses, the rental market is picking back up,” Nicole Bachaud, an economic data analyst at Zillow, said in a statement. “As high demand puts pressure on rents and incomes are unable to keep up, affordability will become more of a challenge in the coming months.”
Nine of the 50 largest metro areas surveyed for the study also experienced higher-than-projected rent increases. Tampa, Fla., saw the greatest increase at 15.6%.
At the same time, nine metro areas saw their average rents decrease, including Seattle, Wash., Boston, Mass., and San Jose, Calif.
Meanwhile, some metro areas are starting to see month-over-month inventory increases, a sign that the market may be relenting.
Las Vegas outpaced the national overage with a 5.6% month-over-month growth of inventory. However, the metro is considerably behind other cities such as Milwaukee, Wisc., and Buffalo, New York, both of which saw double-digit inventory increases in July.
“All signs point to the likelihood that the housing market is beginning to ease off the gas pedal,” Bachaud said.
Robert Davis | The Center Square contributor