The rising cost of rent is pushing people across the country to seek out cheaper areas, according to an October report from the Bank of America Institute.
The institute's report identified the top eight cities where people are moving for lower rent based on a group of Bank of America customers who had open consumer checking, savings, credit, and/or other investment accounts for every quarter between Q4 2020 and Q3 2024.
The moving pattern was established based on the customers' home addresses. The fixed sample size is roughly 45 million customers, according to the report.
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Renters are moving from more expensive cities and towns in the West and Northeast to cheaper locations in the South and the Midwest. This trend started at the beginning of the covid-19 pandemic and continues to this day.
Major metropolises like New York, Boston, San Francisco, San Jose, and Los Angeles have seen some of the biggest net outflows of residents.
"Consumers would rather pack their bags than pay a higher rent, and that can play out in two ways," Joe Wadford, an economist at the Bank of America Institute, tells CNBC Make It. "The first is moving to a less expensive city, and then there's a rising share of people who are saving money and playing it safe by downgrading within the same city."
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The report found that to be especially true among higher-income households, Wadford says.
"We've seen a decrease in new rents for higher income households moving within the same city as opposed to a small growth," he adds. "They could have splurged during the pandemic and rented out a unit that was much bigger than they needed, so they're downgrading right now within the same city,"
The Bank of America Institute deposit data shows that the average consumer's rent payment increased 3.7% year-over-year in September 2024.
Top 8 U.S. cities where people are moving for cheaper rent
- Cleveland, Ohio
- Indianapolis, Ind.
- Las Vegas, Nev.
- Columbus, Ohio
- Jacksonville, Fla.
- Austin, Texas
- Phoenix, Ariz.
- Nashville, Tenn.
The state of Ohio had two cities land in the top 8 on the Bank of America Institute list. The median rent price in Ohio is $1,300, according to Zillow — $750 less than the national median of $2,050.
Cleveland has had one of the fastest rent price hikes in the U.S., increasing 7.2% since last summer.
The city is home to major sports teams like the Cleveland Cavaliers, the Cleveland Guardians, and the Cleveland Browns. It is also home to the Rock & Roll Hall of Fame and the Cleveland Museum of Art, which is free to the public.
Of Ohio's largest cities, Columbus had the highest average rent at $1,559. It's a 4.7% increase over last year and 7.7% higher than Cleveland, according to Zillow.
A July report from RentCafe found that apartments in the city grew in square footage between 2014 and 2023, about the size of a bedroom closet.
Columbus is the state's capital and home to The Ohio State University and the iconic Ohio Stadium. It is also known as the birthplace of the Wendy's restaurant chain.
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