Rent prices expected to increase in all US markets in 2022, according to Freddie Mac

Rising costs have impacted Americans in a number of ways as inflation surges at the fastest rate in nearly 40 years. For consumers, that translates to higher prices on food, utilities and shelter — and rent is no exception.

Annual rent growth is forecasted to be 3.6% in 2022, with rising rent expected in every major U.S. housing market, according to the Multifamily Outlook report from Freddie Mac.

While renters in every metro area are likely to experience price increases, some cities are seeing even higher rates of rental growth. More affordable markets in Arizona, California and Florida are expected to see the highest rate of rent increases. 

Keep reading to see where rent prices will rise the most in 2022, as well as how to combat rental inflation by buying a home. If you're considering buying a home to offset rising rent, visit Credible to compare mortgage rates across multiple lenders by filling out a single form.

MEDIAN RENT SURGES ACROSS THE COUNTRY, REPORT FINDS

Here's where rent will rise at the highest rate

The rental market has been reshaped by the coronavirus pandemic over the past few years, and Freddie Mac expects this trend to continue. 

"During the early days of the pandemic, many residents fled expensive, densely populated, coastal urban city centers for less expense and less dense suburban locations," the report reads. "This demand for lower-cost living continues to reshape the demand seen in markets across the nation."

Many of the fastest-growing rental markets are in areas with a lower cost of living, but rising rent may make living in these areas less affordable. Here's where renters are more likely to experience rising costs:

1. Phoenix: 7.6%
2. Las Vegas: 7.0%
3. Tampa, Fla.: 6.9%
4. Tuscon, Ariz.: 6.5%
5. Albuquerque, N.M.: 6.2%
6. Atlanta: 5.9%
7. Sacramento, Calif.: 5.8%
8. Riverside, Calif.: 5.7%
9. West Palm Beach, Fla.: 5.5%
10. Fort Lauderdale, Fla.: 5.2%

The weakest rent growth is expected high-density areas that experienced a residential exodus during the COVID-19 pandemic. This includes the New York City suburbs (2.2%), Central New Jersey (2.3%) and Long Island (2.7%).

Even among the cities with slower rental growth, rent prices are still predicted to rise. One way to combat rent hikes is to buy a home, since fixed mortgage payments are locked in for a longer period of time. If you're a prospective homebuyer, use Credible's mortgage payment calculator to determine if buying a home is the right move for your financial situation.

SMART REAL ESTATE ADVICE FOR FIRST-TIME HOMEBUYERS AND SELLERS

Homeownership can help offset rising rental costs

Renting comes with a few clear advantages over homeownership. Buying a home comes at a high upfront cost between a mortgage down payment and closing costs, and it can be expensive to maintain over time. Plus, renters have the flexibility to relocate without going through the process of selling a home.

However, the added flexibility of renting comes at a high cost since, rent is likely to increase every time a tenant renews their lease. A landlord is likely to increase your rent at the level of inflation, which means renters don't have protection against inflation.

On the other hand, homeowners are more equipped to manage high rates of inflation. One benefit of buying a home is that you're able to lock in your housing payment for a longer period of time through mortgage financing.

"Three or five years from now, rents would have cumulatively risen year after year, whereas someone is locking in a fixed mortgage payment during that time."

- Lawrence Yun, chief economist at the National Association of Realtors (NAR)

HOME PRICES SURGING ACROSS MANY US CITIES, SAYS NAR

There are also programs for first-time homebuyers that can make the upfront costs of buying a house more affordable. Depending on the state in which you live, first-time homebuyer programs may include down payment assistance and competitive mortgage rates.

Keep in mind that mortgage rates are rising, and they're expected to continue increasing in 2022 as the Federal Reserve implements benchmark rate hikes. If you're considering buying a home, it may be wise to act sooner rather than later to lock in a low mortgage rate.

When borrowing a home loan, it's important to compare rates across multiple mortgage lenders to ensure you're getting the best possible offer. You can browse current mortgage rates in the table below, and visit Credible to start shopping for a home loan.

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