Rent increases slowed in CT, but the cost of rent isn’t dropping
Apartment rent prices in Connecticut have plateaued for the first time since the start of the COVID-19 pandemic.
Despite the fact that prices have stabilized, the cost of rent is still higher than what it would have been at this same time, if the pandemic never happened. The pandemic’s disruption to the housing market is to blame for the increase in rent prices, according to a report by the company Rent.
The price plateau marks a cooling of the market, with less affordable housing, and a return to the industry's cyclical pattern of rent prices increasing in the spring and early summer, and decreasing in the winter, Rent data journalist Jon Leckie said.
“There's a lot more supply out there,” Leckie said. “At the same time, we're also seeing a big sort of decrease in demand, just across the industry. There's not as many people looking for an apartment now. Demands are at 10-year lows, so you have an increase of supply and a decrease in demand.”
Connecticut saw the third largest decrease in rent price growth in the country in the last few months, behind New Hampshire and Louisiana, according to the study. The median rent in Connecticut is $2,000, with a year-over-year cost increase of 1.19%.
The state’s month-over-month cost, however, decreased by 2.35%, according to the report.
“When we started digging into it on a state level, most of the people who were leaving the Northeast were leaving states like ... New York and Massachusetts,” Leckie said. “The flip side of that was that [in] states like New Hampshire and Connecticut, we're seeing a big boost in inbound migration.”
The state’s decrease in rent growth marks a cooling off of migration caused by the pandemic and an increase in apartment availability with less people moving into the state, Leckie said.
Bridgeport saw significant growth, with rent up 4%, on a yearly basis and up about 1% on a monthly basis.
“When you look at Bridgeport, right on the Metro-North line, there's already a lot of people even before the pandemic that lived in the Stamford, Bridgeport area and then commuted into the city,” Leckie said. “I think that proximity to it drew more people there, New Haven, still on the same train line.”
Despite the state no longer seeing a rise in rent, the cost of rent is still much higher than projected before the pandemic, according to Sean Ghio, Policy Director at the housing advocacy nonprofit Partners for Strong Communities.
“We know the increase in rent just continues to outpace the increase in the household income growth,” Ghio said. “What that means is with each passing year, it compounds itself. An average renter, their rental becomes less affordable every single year, even if they're in the same job, even if they're in the same home right now, if the rent increases. That sort of unaffordability is going to increase over time.”
Rents are likely to continue at the exacerbated rate until more homes and affordable apartments are constructed and become available.
However, statewide municipalities stymie developers’ attempts to establish new housing, Ghio said.
“It's a range, it goes up and down a little over the year. That's kind of typical, but the larger issue is that the peak or the trough, but the seasonality,” Ghio said. “It's outpacing and they have to do that and it's just as simple as supply and demand and if there's more chasing and not enough houses, the prices go up.”
Both Hartford and New Haven saw an increase in some rent as well. Hartford rent is up about 2% on a yearly basis and is flat on a monthly basis. New Haven is down about 1% on a yearly basis and up 4% on a monthly basis.