Chattanooga's apartment rental rates are rising faster than in most cities, although housing costs in the Scenic City still remain more than 12% below the U.S. average, according to a new Zumper national rent report.
In the past 12 months, the average rent for a one-bedroom apartment in Chattanooga increased 8.2% to $1,320 a month, while the rate for two-bedroom apartments in Chattanooga jumped by 18.3% over the past year to an average rent of $1,550 a month, Zumper reported Tuesday.
Rising rental rates
Among Tennessee's major cities, Chattanooga had the biggest increase in rental rates in the past year but remained cheaper than apartment rates in either Nashville or Knoxville during August.
— Nashville: Average one-bedroom unit is $1,780 a month, unchanged from the previous year, and two-bedroom units average $2,000 a month, up 5.3% from a year ago.
— Knoxville: Average one-bedroom unit is $1,400 a month, up 14.8% from the previous year, and two-bedroom units average $1,640 a month, up 2.5% in the past year.
— Chattanooga: Average one-bedroom unit is $1,320 a month, up 8.2% in the past year, and two-bedroom units average $1,550 a month, up 18.3% from a year earlier.
— Memphis: Average one-bedroom unit is $1,000 a month, up 3.1% in the past year, and two-bedroom units average $1,090 a month, up 6.9% from a year earlier.
Source: Zumper National Rent Report
The increases continued to outpace inflation over the past year, but housing experts expect the increases to slow or even stagnate in coming months as higher interest rates and a slower economy limit the ability of landlords to keep pushing rates higher.
"In the past couple of years up until three or four months ago, the rents felt like they were increasing every day," Robert Fisher, a real estate agent with Keller Williams who specializes in multifamily housing, said in a telephone interview Tuesday. "But rent increases have definitely slowed down in the market, and those landlords that are still raising rates are finding that their vacancy rates are going up."
Among the nation's 100 biggest cities, Chattanooga ranked as the 55th most expensive city for apartment rental costs, with rates below Nashville and Knoxville but higher than Memphis.
The national median for a one-bedroom home is $1,510, up 1.6% from a year ago with the smallest year-over-year increase in more than two years, according to Zumper. Two-bedroom apartments nationwide average $1,864 a month, which is 3.9% more than a year ago.
After double-digit gains during the pandemic, apartment rent increases this year are trailing the inflation rate in most cities, according to the review of more than 1 million apartment properties by Zumper.
The new figures "are proof positive that the wild price swings we saw during the pandemic will take even more time to normalize," and many renters are now in a wait-and-see mindset, Zumper CEO Anthemos Georgiades said in a report Tuesday.
"Americans' nerves about economic uncertainty have been somewhat soothed by slowing inflation, but there are certainly lingering fears following the roller-coaster ride our economy — and the rental market — have been on for more than three years," Georgiades said. "We expect rental rates to continue doing exactly what we've seen over the last year: gradually slow down and settle into seasonal patterns."