The average monthly rent of apartments in California increased substantially 2021, followed by a period of stabilization. In May 2024, the average rent of a two-bedroom apartment cost over 2,200 U.S. dollars, up from 1,849 U.S. dollars in December 2020 before rents started to rise. Nevertheless, not all cities saw rents rise at the same pace.

The average monthly rent for all apartment types in the U.S. soared in 2021 and 2022, followed by a slight decline in the next two years. In January 2025, the monthly rent for a two-bedroom apartment amounting to 1,356 U.S. dollars. That was an increase from 1,136 U.S. dollars in January 2021 but a decline from the peak value of 1,427 U.S. dollars in August 2022. Where are the most expensive apartments in the U.S.? Apartment rents vary widely from state to state. To afford a two-bedroom apartment in California, for example, a renter needed to earn an average hourly wage of nearly 42 U.S. dollars, which was approximately double the average wage in North Carolina and three times as much as the average wage in Arkansas. In fact, rental costs were considerably higher than the hourly minimum wage in all U.S. states. How did rents change in different states in the U.S.? In 2024, some of the most expensive states to rent an apartment only saw a moderate increase in rental prices. Nevertheless, rents increased in most states as of January 2025. In West Virginia, the annual rental growth was the highest, at seven percent.

VITAL SIGNS INDICATOR
Rent Payments (EC8)

FULL MEASURE NAME
Median rent payment

LAST UPDATED
January 2023

DESCRIPTION
Rent payments refer to the cost of leasing an apartment or home and serves as a measure of housing costs for individuals who do not own a home. The data reflect the median monthly rent paid by Bay Area households across apartments and homes of various sizes and various levels of quality. This differs from advertised rents for available apartments, which usually are higher. Note that rent can be presented using nominal or real (inflation-adjusted) dollar values; data are presented inflation-adjusted to reflect changes in household purchasing power over time.

DATA SOURCE
U.S. Census Bureau: Decennial Census - https://nhgis.org
Count 2 (1970)
Form STF1 (1980-1990)
Form SF3a (2000)

U.S. Census Bureau: American Community Survey - https://data.census.gov/
Form B25058 (2005-2021; median contract rent)

Bureau of Labor Statistics: Consumer Price Index - https://www.bls.gov/data/
1970-2021

CONTACT INFORMATION
vitalsigns.info@mtc.ca.gov

METHODOLOGY NOTES (across all datasets for this indicator)
Rent data reflects median rent payments rather than list rents (refer to measure definition above). American Community Survey 1-year data is used for larger geographies – Bay counties and most metropolitan area counties – while smaller geographies rely upon 5-year rolling average data due to their smaller sample sizes. Note that 2020 data uses the 5-year estimates because the ACS did not collect 1-year data for 2020.

1970 Census data for median rent payments has been imputed from quintiles using methodology from California Department of Finance as the source data only provided the mean, rather than the median, monthly rent. Metro area boundaries reflects today’s metro area definitions by county for consistency, rather than historical metro area boundaries.

Inflation-adjusted data are presented to illustrate how rent payments have grown relative to overall price increases; that said, the use of the Consumer Price Index (CPI) does create some challenges given the fact that housing represents a major chunk of consumer goods bundle used to calculate CPI. This reflects a methodological tradeoff between precision and accuracy and is a common concern when working with any commodity that is a major component of CPI itself.

The median rent for one- and two-bedroom apartments in Los Angeles, California, amounted to about 2,057 U.S. dollars in January 2025. Rents soared during the COVID-19 pandemic, with rental growth hitting 16.5 percent in March 2022. This trend has since reversed, with growth turning negative in May 2023. Among the different states in the U.S., California ranks as the second most expensive rental market after Hawaii.

In January 2025, apartment rents recorded an annual growth in most U.S. states. Nevertheless, the national average rent declined by about one percent. West Virginia was the state with the largest rental increase, while Colorado measured the largest decline. California, one of the most expensive states to rent an apartment, such as California, saw an increase of about one percent from the previous year. How much should you earn to afford to rent an apartment in different states in the U.S.? Both employment opportunities and the living costs vary widely across the country. In California, which is among the most competitive housing markets in the U.S., the hourly wage needed to afford a two-bedroom apartment rental was roughly 47 U.S. dollars, more than twice higher than in North Carolina, Louisiana, or Michigan in 2024. When it comes to the median household income, on the other hand, California does not even make it in the top ten states. How much should you earn to afford a home in some of U.S. largest metros? In 2022, the annual salary needed to buy a median-priced home in the U.S. was 97,000 U.S. dollars. However, in some of the largest metropolitan areas in the United States, where housing prices are up to two or three times higher, homebuyers would have to earn more than 100,000 U.S. dollars to afford a home. In San Jose, which was the most expensive metro, the annual salary needed for a median-priced home was approximately 374,000 U.S. dollars.

This table contains data described by the following dimensions (Not all combinations are available): Geography (247 items: Carbonear; Newfoundland and Labrador; Corner Brook; Newfoundland and Labrador; Grand Falls-Windsor; Newfoundland and Labrador; Gander; Newfoundland and Labrador ...), Type of structure (4 items: Apartment structures of three units and over; Apartment structures of six units and over; Row and apartment structures of three units and over; Row structures of three units and over ...), Type of unit (4 items: Two bedroom units; Three bedroom units; One bedroom units; Bachelor units ...).

The monthly median asking rent for unfurnished apartments in the United States declined by about 74 U.S. dollars between in 2023. In the fourth quarter of 2023, the median rent amounted to 1,751 U.S. dollars, down from 1,825 U.S. dollars in 2022. This decrease followed a decade of steady growth, interrupted only in 2020 during the COVID-19 pandemic. The U.S. rental market As rental apartment vacancy rates fall, rents are on the rise. This makes it more difficult for Americans to, first, find an apartment to rent, and second, find an apartment which they can afford. Nevertheless, renting has become much more common in recent years, with the number of renter households having substantially increased in the past two decades. In 2023, there were approximately 45 million renter households in the U.S. Rents in different states Of course, rents vary from state to state. The most expensive rents are found in Hawaii, California, District of Colombia, New Jersey, and Florida. Following the COVID-19 pandemic, growth was the strongest in the Sun Belt states, and especially in states with lower costs of living, such as Texas. In Austin, TX, the average rent soared by nearly 26 percent in 2021, and remained elevated, despite a slight decline in 2023.

Rents for industrial real estate in the U.S. have increased since 2017, with flexible/service space reaching the highest price per square foot in 2024. In just a year, the cost of, flex/service space rose by nearly five U.S. dollars per square foot. Manufacturing facilities, warehouses, and distribution centers had lower rents and experienced milder growth. Los Angeles, Orange County, and Inland Empire, California, are some of the most expensive markets in the country. Office real estate is pricier Industrial real estate is far from being the most expensive commercial property type. For instance, average rental rates in major U.S. metros for office space are much higher than those for industrial space. This is most likely because office units are generally located in urban areas where there is limited space and thus higher demand, whereas industrial units are more suited to the outskirts of such urban areas. Industrial units, such as warehouses or factories, require much more space because they need to house large, heavy equipment or serve as a storage unit for future shipments. Big-box distribution space is gaining in importance Warehouses and distribution may currently command the lowest average rent per square foot among industrial space types, but the growing popularity of the asset class has earned it considerable gains over the past years. In 2021 and 2022, high occupier demand and insufficient supply led to soaring taking rent of big-box buildings. During that time, the vacancy rate of distribution centers fell below six percent. The development of industrial and logistics facilities has accelerated since then, with the new supply coming to market causing the vacancy rate to increase and the pressures on rent to ease.

VITAL SIGNS INDICATOR
Home Prices (EC7)

FULL MEASURE NAME
Home Prices

LAST UPDATED
December 2022

DESCRIPTION
Home prices refer to the cost of purchasing one’s own house or condominium. While a significant share of residents may choose to rent, home prices represent a primary driver of housing affordability in a given region, county or city.

DATA SOURCE
Zillow: Zillow Home Value Index (ZHVI) - http://www.zillow.com/research/data/
2000-2021

California Department of Finance: E-4 Historical Population Estimates for Cities, Counties, and the State - https://dof.ca.gov/forecasting/demographics/estimates/
2000-2021

US Census Population and Housing Unit Estimates - https://www.census.gov/programs-surveys/popest.html
2000-2021

Bureau of Labor Statistics: Consumer Price Index - http://data.bls.gov
2000-2021

US Census ZIP Code Tabulation Areas (ZCTAs) - https://www.census.gov/programs-surveys/geography/guidance/geo-areas/zctas.html
2020 Census Blocks

CONTACT INFORMATION
vitalsigns.info@bayareametro.gov

METHODOLOGY NOTES (across all datasets for this indicator)
Housing price estimates at the regional-, county-, city- and zip code-level come from analysis of individual home sales by Zillow based upon transaction records. Zillow Home Value Index (ZHVI) is a smoothed, seasonally adjusted measure of the typical home value and market changes across a given region and housing type. It reflects the typical value for homes in the 35th to 65th percentile range. ZHVI is computed from public record transaction data as reported by counties. All standard real estate transactions are included in this metric, including REO sales and auctions. Zillow makes a substantial effort to remove transactions not typically considered a standard sale. Examples of these include bank takeovers of foreclosed properties, title transfers after a death or divorce and non arms-length transactions. Zillow defines all homes as single-family residential, condominium and co-operative homes with a county record. Single-family residences are detached, which means the home is an individual structure with its own lot. Condominiums are units that can be owned in a multi-unit complex, such as an apartment building. Co-operative homes are slightly different from condominiums in that the homeowners own shares in the corporation that owns the building, not the actual units themselves.

For metropolitan area comparison values, the Bay Area metro area’s median home sale price is the population-weighted average of the nine counties’ median home prices. Data is adjusted for inflation using Bureau of Labor Statistics metropolitan statistical area (MSA)-specific series. Inflation-adjusted data are presented to illustrate how home prices have grown relative to overall price increases; that said, the use of the Consumer Price Index (CPI) does create some challenges given the fact that housing represents a major chunk of consumer goods bundle used to calculate CPI. This reflects a methodological tradeoff between precision and accuracy and is a common concern when working with any commodity that is a major component of the CPI itself.

Commercial rents services price index (CRSPI) by North American Industry Classification System (NAICS). Monthly data are available from January 2006 for the total index and from January 2019 for all other indexes. The table presents data for the most recent reference period and the last five periods. The base period for the index is (2019=100).

The average annual rent for warehouses and distribution centers in the Greater Los Angeles area declined in 2023, after peaking in 2022. In the first quarter of 2024, the average rent amounted to 18.36 U.S. dollars per square foot. In the U.S., Greater Los Angeles is the market with the largest warehouse inventory.

The median rent for one- and two-bedroom apartments in San Jose, CA, amounted to about 2,679 U.S. dollars at the end of 2023. Rents decreased after the beginning of the coronavirus pandemic, by 13 percent between March 2020 and March 2021. This trend reversed later that year, and in June 2022, the annual rental growth peaked at 15.6 percent. Among the different states in the U.S., California ranks as the second most expensive rental market in 2023.

In 2022, San Mateo, San Francisco, and Santa Clara were the most expensive districts for housing in the San Francisco Bay Area. In San Francisco, the average square footage price of single-family homes exceeded 1,000 U.S. dollars per square foot. Housing in Solano, on the other hand, was most affordable, with the average square footage price for single family homes at 370 U.S. dollars.

How expensive is buying a home in San Francisco? Few metros in the U.S. are more expensive than San Francisco, CA. In 2022, the median sales price of existing single-family homes in San Francisco was about 1.4 million U.S. dollars, making it the second priciest market in the U.S. House prices in the Golden City, were not always so high: in 2014, a two-bedroom house in the Bay Area would sell for less than 500,000 U.S. dollars but since then, the median price has more than doubled.

How much does renting an apartment cost? Despite rents falling in 2020, renting in San Francisco is still far from cheap. Renting a two-bedroom apartment cost close to 4,000 U.S. dollars in 2021. California is one of the least affordable states for renters. In fact, to afford to rent such an apartment, a household needs approximately three full time jobs at minimum wage or two full time jobs at mean wage.

In 2023, Alaska reported the highest rent for public housing among all the states in the United States. The average monthly rent in Alaska amounted to 715 U.S. dollars for government-subsidized housing. California, New York, and Hawaii were some of the states with the highest average rent, with rental costs above 550 U.S. dollars. On the other hand, Puerto Rico offered the most affordable public housing with the lowest rent among all states, coming in at just 121 U.S. dollars. Some other affordable states for low-income families were Arkansas, Alabama, Oklahoma, and Ohio, all costing less than 320 U.S. dollars.

The monthly rent of mobile homes in the U.S. has gradually increased since 2010, peaking in 2024. In the third quarter of that year, the average monthly rent for manufactured homes was 717 U.S. dollars. Similarly, apartment rents also soared in 2022, followed by a slight decline in the next two years. Where in the U.S. are manufactured homes most popular? States with a growing economy and large population provide the best opportunities for manufactured housing. In September 2023, Texas had the highest number of mobile homes in the United States. Other states with a high number of mobile homes were North Carolina and Florida. Moreover, Texas also boasted the highest number of manufactured home production plants. Affordability of mobile homes across the U.S. Manufactured homes are considerably less expensive than regular homes, which makes them an attractive option for people looking to purchase property without breaking the bank. Mobile homes are cheaper because manufacturers benefit from economies of scale due to large-scale production, which allows them to lower costs per unit. Additionally, mobile homes lose value faster than traditional homes, which can make them more affordable to purchase initially. The average sales price for a new mobile home has been on the rise, but during the housing boom in 2021, it increased dramatically.

Among the 30 markets with the largest industrial and logistics real estate inventory in the United States,Orange County, CA, had the highest rental rate in the first quarter of 2024. The square footage rent of warehouse and distribution centers was 20.59 U.S. dollars, while for manufacturing sites it was 19.22 U.S. dollars. In the largest market, Chicago, IL, rents were significantly lower, at less than seven U.S. dollars.

Among the 30 markets with the largest inventory of industrial and logistics real estate, Orange County, CA had the lowest vacancy rate of one percent in the first quarter of 2024. Chicago, IL, the largest market by total inventory, ranked 13th, with 4.6 percent of industrial and logistics real estate vacant. Phoenix, AZ, was the market with the highest rate at almost 11 percent. Overall, the share of vacant industrial and logistics properties has increased since 2022.

Commercial property prices in the U.S. increased plateaued in 2023 after a period of rapid growth between 2014 and 2021. In the third quarter of 2023, the commercial property price index equaled 207.61 index points, reflecting a double increase in prices since 2010, which was the baseline year for the index. How have prices of different property types developed over the past years? After more than a decade of uninterrupted growth, office real estate prices started to decline in 2022, reflecting a decline in occupier demand and a tougher lending environment. Industrial real estate prices, which have grown rapidly over the past few years, also experienced a correction in late 2022. Retail real estate prices displayed most resilience amid the difficult economic environment, with the equal weighed repeat sales index remaining stable. How much is invested in new commercial properties? The value of commercial real estate construction has been on the rise since 2010 in the United States. This trend mirrors the recovery seen across all economic sectors after the 2007-2009 recession. However, investment volumes in commercial property vary by type, with private office space, warehouses, and retails reading the pack.

Retail properties had the highest capitalization rates in the United States in 2023, followed by offices. The cap rate for office real estate was 6.54 percent in the fourth quarter of the year and was forecast to rise further to 7.39 percent in 2024. Cap rates measure the expected rate of return on investment, and show the net operating income of a property as a percentage share of the current asset value. While a higher cap rate indicates a higher rate of return, it also suggests a higher risk. Why have cap rates increased? The increase in cap rates is a consequence of a repricing in the commercial real estate sector. According to the National NCREIF Property Return Index, prices for commercial real estate declined across all property types in 2023. Rental growth was slow during the same period, resulting in a negative annual return. The increase in cap rates reflects the increased risk in the investment environment. Pricing uncertainty in the commercial real estate sector Between 2014 and 2021, commercial property prices in the U.S. enjoyed steady growth. Access to credit with low interest rates facilitated economic growth and real estate investment. As inflation surged in the following two years, lending policy tightened. That had a significant effect on the sector. First, it worsened sentiment among occupiers. Second, it led to a decline in demand for commercial spaces and commercial real estate investment volumes. Uncertainty about the future development of interest rates and occupier demand further contributed to the repricing of real estate assets.