Bank of America unveils the surprising cost of renting

The housing market has been challenging for homeowners and renters since mortgage rates skyrocketed in 2022, and rent prices surged as demand grew in a post-COVID market.

While 2020 and 2021 were considered a buyer’s market and renters got competitive leases, the years that followed created unprecedented price increases and dwindling housing supply for buyers and renters.

Bank of America recently released a new report on rental market trends, and the data shows some surprising trends for renters.

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The competitive housing market for renters has prompted a new trend: consistent lease renewals to stay in rental units longer. The costs of moving have surged in most regions in the U.S., and renters hope to avoid the stress of moving and the extra costs associated with it.

However, rental market trends vary by location, and different regions are experiencing different demand and inventory levels.

A family looks at their new home. Rising housing costs have impacted renters and homebuyers, prompting fewer to move locally or long-distance.
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Fewer renters are moving

The COVID-19 lockdowns impacted most major cities. Local businesses shuttered as people fled to their hometowns or remote getaways to lockdown, and rent prices plummeted.

Since then, housing markets have recovered, and home buying and rental prices have increased with inflation and to recoup COVID losses. However, the 2025 rental market is predicted to be more advantageous than the homebuying market.

According to Redfin analysis, mortgage rates are only expected to moderate slightly to around 6.5%, while rental prices are expected to stabilize while wages grow.

More on homebuying:

Bank of America found that the total number of Americans moving — locally within the same metro area and long-distance moves — has dropped 40% since Q4 2020.

Most renters relocating are just moving to a new apartment within the same city, and many don’t find the cost-benefit tradeoff worthwhile. The average cost of moving locally is $2,200, but it can be upwards of $10,000 in major cities.

However, housing markets vary by location, and certain cities are seeing an influx of new residents while others are seeing residents exiting to seek cheaper options.

Renting trends vary by region

The initial mass exodus from big U.S. cities prompted by COVID lockdowns created an influx of residents to more affordable options with warm weather in Florida and Texas. Homeowners and renters appreciated the lack of state income tax in both regions and getting more bang for their buck.

While some cities — like Austin, San Antonio, and Jacksonville — are still seeing positive migration, others like Miami, Tampa, Houston, and Dallas have seen negative growth in the second half of 2024.

Still, Northeast and West Coast cities are seeing the most significant share of renters moving elsewhere.

According to the U.S. Census Bureau, renters comprise 34% of all movers and tend to be younger and have lower incomes. However, Bank of America found that renters jumped the most in the least expensive regions — creating a strain for many renters to keep pace with housing and inflation.

Rents surged 8% year-over-year in the zip codes with the lowest asking rents, as opposed to 4% in all other areas. Residential building permits initially rose in 2022 and 2023 but plummeted in 2024 in all regions except the south, potentially driving up rent growth last year.

Renters already locked into a lease with a competitive rent may stay put to avoid moving costs. However, certain states like Florida do not have rent stabilization legislation, meaning they can charge market rates and push renters out with annual rent hikes.

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