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Belong looked at which states have recorded the biggest rent growth in the first half of 2023 using data from Apartment List.

States that have seen the largest rent growth so far in 2023

After a post-pandemic surge, rental rate increases are slowing down, growing just 2.6% in the first seven months of 2023.

In the last five years, renters have felt the pressure on their budgets, but most of the pain has come since the pandemic. Although average rent prices fell for a few months at the onset of the pandemic as people left major cities, demand rebounded as the price of homes soared, putting homeownership out of reach for many. According to Apartment List, the overall median rent in the U.S. has risen 22.4% to $1,372 since March 2020.

Now that growth is tapering off, partly due to the completion of apartments that underwent construction during the COVID-19 pandemic. Through 2024, about 1 million multifamily rental units should hit the market, Apartment List's chief economist Igor Popov told The Washington Post, which may help meet some of the demand.

However, rents are still rising and generally remain high, creating affordability issues in many parts of the country, as inflation and the end of pandemic eviction protections continue to drag on renters' budgets.

Belong looked at which states have recorded the biggest rent growth in the first half of 2023 using data from Apartment List. The data represents the overall average monthly rent in these states from January to June 2023, compared to the average 2022 rent. Data was not available for Alaska, Maine, or Vermont.

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Even though there's plenty of demand for rentals in cities like Wichita, a lack of new development continues to put pressure on the market. That's partly due to high construction costs, which developers can't easily recoup through rents, as rents in the city are still relatively low, per KWCH.

Wichita's not the only city with high demand—Overland Park, a suburb of Kansas City, is one of the most popular rental markets in the country, according to a July 2023 RentCafe analysis, due to its affordability within the metro area.

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Although statewide rents are still on the rise, prices in Northwest Arkansas have been increasing faster than the rest of the state. According to Axios, rents in this region have risen 27% since 2001.

Meanwhile, vacancy rates in the region's key towns of Rogers, Bentonville, Springdale, and Fayetteville are below 3%, which essentially means full occupancy—since some apartments will need to be offline for repairs, painting, or cleaning at any given time.

In Little Rock, in the central part of the state, a three-decade focus on commercial development has contributed to a lack of residential rental options, KATV reports. This has caused an increase in rental prices across the city.




In Iowa, both single-family homes and apartment rentals have experienced rate increases. In Des Moines, that makes for a tighter rental market for younger workers coming into the job market and people who have relocated from larger, more expensive cities, WHO-13 reports.

A report by the National Low Income Housing Coalition and Prosperity Indiana notes that to keep housing costs at no more than 30% of income—a figure financial experts use to determine how much someone should spend on housing and still have enough money to cover their other expenses—renters must earn an average of $19 an hour.

But renters' actual average wage is just $17.86 an hour. Renters in Indianapolis are feeling the squeeze, but more units coming on the market aren't causing rents to go down. New construction is commanding higher prices, and investors are buying older apartment complexes, renovating them, and raising the rents, Indiana University's Center for Real Estate Studies' Sara Coers told WRTV.

More Mississippians are opting to rent, as increases in home prices and interest rates have put homeownership out of reach for many. That's created more demand for rental units, WXXV reports.

Meanwhile, rental property owners are also facing higher costs, so they've increased rents to get a return on their investment. Demand for rentals along the Gulf Coast is so intense landlords are raising rents by hundreds of dollars, according to WLOX.

College towns are also not immune to higher prices, the Waller, Weeks and Johnson Rental Index notes. Renters are paying 20% more in Oxford, home to the University of Mississippi, because the city doesn't have enough inventory to meet demand.

While demand is a factor in rental increases, in Wisconsin, this demand is driven by people who want to live on their own, PBS Wisconsin reports. According to the state's Demographic Services Center, the average household size has dropped from 3.224 people in 1970 to 2.353 people in 2022, even though the population has grown by 1.53 million people during that same time.

Costs for building owners have also skyrocketed, who have to manage higher prices for financing, maintenance, repair, and even cleaning costs, which require them to raise rents to cover their investment.

Between 2018 and 2022, 294,000 people left the Chicago metro area, in part due to housing affordability, according to ABC News. However, the Chicago Tribune notes that a lack of rental housing keeps prices high and sparks bidding wars for apartments in popular neighborhoods.

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Uncover the booming housing markets where institutional investors are buying the most investment and rental properties, for clues on where to buy property next.

10 Housing Markets Where Institutional Investors are Buying the Most

Belong examined metros where institutional investors have been the most prevalent, using data from real estate research firm ATTOM Data. 

10 housing markets where institutional investors are buying the most

Rising mortgage rates may keep some homebuyers out of the real estate market, but institutional investors are still diving in to build portfolios of properties nationwide.

Institutional investors are companies or other entities that purchase 10 or more properties in a single year. These buyers bought 1 in 15 single-family homes sold in the third quarter of 2022, or 6.7% of all home sales. While not as high as the 8.4% share recorded at the same time in 2021, it is slightly up from the second quarter in 2022.

Overall, home sellers made less profit in the third quarter, due to less difference between purchase and resale median home prices. Typical profit margins fell to about 55% as quarterly home prices dipped for the first time in nearly three years.

Despite that drop in prices, institutional investors are still buying homes in some markets. Belong analyzed where institutional investors were the most prevalent during the third quarter of 2022, using data from real estate research firm ATTOM Data. To be included, each metropolitan area—which includes a city and its surrounding towns—needed a population of 200,000 or more and must have recorded 50 or more home sales in the third quarter.

In general, metro areas seeing the most investment are smaller cities in the Sun Belt region, which gained popularity during the pandemic and continue to see interest from prospective buyers.

- Total institutional investor sales: 1,646

Indianapolis has been a seller's market in recent years, with home prices in Marion County rising 18% from 2020 to 2021. The lack of inventory has also put pressure on pricing, even though the city remains relatively affordable.

The metro area's steady population growth—6% from 2016 to 2021—makes it an attractive target for real estate investment. The area is experiencing high demand for multifamily housing, particularly in the suburbs where the property is more affordable. The suburbs also offer more room for popular amenities such as green space and swimming pools.

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- Total institutional investor sales: 3,604

From 2020 through July 2021, the Phoenix metro area added more than 100,000 people, which requires a lot of housing. During the pandemic, a tight supply of houses and high demand caused prices to skyrocket. Pair that with rising interest rates, and foreclosures are starting to rise again.

While the Phoenix area experienced a drop of 66% in foreclosure auction volume from the third quarter of 2019 to the third quarter of 2022, that metric turned around in mid-2022, with a 150% increase in foreclosure auctions between April and October, according to HousingWire. This increase signals an opportunity for investors.

- Total institutional investor sales: 646

In Lakeland, the real estate market is still strong. For the year ending in August 2022, median sales prices in Polk County rose 27.7% to $313,409.

Lakeland's suburbs are attractive, too—offering more spacious homes at more affordable prices. Some people are even looking farther out into Polk County, where builders are offering even more for even less. That has helped keep the metro area's affordability in check, as it's still cheaper to buy a home than it is to rent, according to ATTOM Data.

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- Total institutional investor sales: 1,973

The boom in Charlotte's real estate market has put many homes out of reach for even middle-income earners. Median house prices in September 2022 were $420,000, a nearly 54% increase from January 2020, according to UNC Charlotte's Childress Klein Center for Real Estate. This jump was partly fueled by a population boom that created 66,211 more households in the metro area by 2021.

Rents continue to rise throughout the region, with many cities experiencing double-digit increases year-over-year. In September 2022, the median rent for a one-bedroom apartment ranged from $1,010 in Gastonia to $1,430 in Charlotte.

- Total institutional investor sales: 318

Although Clarksville's housing market has been deemed "overvalued," sales were up nearly 8% year-over-year in June 2022, and inventory is still tight. Prices also continue to increase, up 30.5% in the metro region in the second quarter of 2022 compared to the same period in 2021. This was the highest price jump in the entire state, according to the Business and Economic Research Center at Middle Tennessee State University.

Clarksville's metro area saw 6% population growth from 2019 to 2021. Remote working and better high-speed internet access have spurred many new residents to move here from more expensive cities, and millennials jumping into the market continue to fuel demand.

- Total institutional investor sales: 5,188

Rising interest rates have contributed to a pause in Atlanta's real estate market. In October 2022, 4,415 homes sold, a 35% decrease year-over-year, according to First Multiple Listing Service data. This was the slowest sales month for the region since January 2020, and the slowest October since 2011.

Institutional investors still see Atlanta as a gem. In November 2022, JPMorgan announced a joint venture with Haven Realty Capital to invest in build-to-rent, single-family homes. The venture kicked off with a deal for 250 homes in three Atlanta metro area communities.

- Total institutional investor sales: 200

Jill Jaracz

Cleveland-based writer who has covered a number of topics including bridal, financial services, and local news. Jill also covered the Beijing 2022 Olympics and Paralympics from the closed loop in China.

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