Even now, I still encounter people every day who believe that it's in their best interest to rent and wait out the hot housing market. While not everybody can afford to buy, it's worth having a discussion about the record increases in rent across the DMV area before you decide to sign another lease. While home owners have fixed mortgages that give them the peace-of-mind of knowing that their living expenses will not increase, average rents in Washington DC have increased 12.5% from April 2021 according to Rent.com and The Apartment Guide. Studio and 1 bedroom apartment rents are up over 15% from last year and even 3 bedroom apartments which have seen the slowest rent increases are up 10%. In Northern Virginia, the news is even worse with average rents up 16% from April 2021 according to a new study by Apartment List.
In Washington DC, the average 1 bedroom is now renting for just over $2300 per month and the average 2 bedroom rent is $3200. The most expensive neighborhoods to rent in the area are West End ($3300 average for a 1bedroom), DuPont Circle ($3022 average for a 1bedroom), and Foggy Bottom ($3340 for a 1 bedroom). For some perspective, a $3200 monthly payment is similar to what your mortgage would be if you bought a $600,000 home with 7% down, even with mortgage rates surging to 5.25%.
During the period of heavy inflation that we continue to experience, you can count on rents continuing to rise at record rates. While interest rates are rising too, I still HIGHLY encourage you to think about how nice it would be to have a fixed monthly payment year after year, AND a monthly payment that contributes money into your own equity that you can someday recoup upon selling. If rents continue rise again next year at even just a 10% clip, we will be approaching $3,000 per month for 1 bedroom units in many popular DC neighborhoods and $2500 in even the older buildings of Arlington.
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