A key national survey that provides a monthly snapshot of the nation's rental markets shows that the cost of renting a home is on the rise -- but not in the Twin Cities area.
The Zillow Rent Index, compiled by the real estate research firm, noted a slight drop in rental costs in the metro area last month. The Twin Cities is one of only two metropolitan areas of the 36 that Zillow survey where prices are falling; the other to experience a drop in Zillow's January survey is the Chicago area. Both cities still have above-average median rents.
While rents were up 3.3 percent nationally in the January year-over-year analysis, the Twin Cities market experienced a -0.3 percent drop, leading to a median rental rate of $1,502.
The trend represents good news for renters. The CEO of Renter’s Warehouse told WCCO that he believes rental rates could stay low as more apartment buildings come online for renters in the next 12 to 18 months.
The Star Tribune talked with experts familiar with the metro rental market who question the conclusions in the Zillow January report. The newspaper noted that Marquette Advisors' Metro Trends Report shows a 4.1 percent increase year-over-year for the fourth quarter of 2014.
"We are seeing minor modifications in some submarkets, but overall we are seeing an increase in rents," Mary Bujold, president of Maxfield Research in Minneapolis, told the Star Tribune.
The Zillow report says that since 2000, rents have risen roughly twice as fast as wages nationwide. In Minneapolis, prices peaked last March at around $1,520. More than one-third of Americans are renters.