Pandemic migration lifts rents 25 percent in lowest-cost markets
A Federal Reserve Board study finds that pandemic remote work migration drove faster rent increases in previously low-rent areas than in high-rent markets between 2019 and 2022. Lower-income renters faced the steepest affordability deterioration as rental costs outpaced earnings.
Unequal rental inflation across regions
Federal Reserve Board researchers Erin Troland, Isabella Agnes, Jessica Liu, Fatimah Shaalan, Michelle Tran, and Douglas Webber analyzed RealPage and American Community Survey data across Census microdata areas.
Between December 2019 and December 2022, asking rents for new multifamily leases grew 25 percent in the lowest-rent quartile, compared to 15 percent in the highest-rent quartile.
Average multifamily rent spending rose 19.4 percent in the lowest quartile and 16.3 percent in the top quartile.
Rents did not rise faster in areas with lower pre-pandemic rent-to-income ratios, showing that remote earners targeted lower nominal housing costs rather than areas where local wages matched rents.
Mounting pressure on bottom earners
Lower-income households bore the heaviest financial strain.
Nationally, the median rent-to-income ratio for renters in the bottom income quintile jumped from 63.0 percent in 2019 to 79.7 percent in 2022, while the cost-burdened share reached 88.3 percent.
The authors caution that aggregate area-level affordability metrics mask local distress: high-earner inflows mathematically suppress local rent-to-income ratios even as price hikes displace or squeeze existing residents.
Averages hide the pain
The paper demonstrates how remote work decoupled local wages from housing costs to the detriment of incumbent renters.
Relying on area averages dangerously obscures the severe affordability squeeze on lower-income households.
Policymakers must examine panel data on individual renters to properly gauge long-term displacement risks.