For renters living in an apartment amid the coronavirus crisis, a once-cozy bedroom may be feeling cramped, especially if they’re working from home. But there’s good news, unless they live in St. Louis or Los Angeles.
As some Americans fled cities because of the crisis, the cost of renting one-bedroom and two-bedroom apartments fell in at least a quarter of the 100 largest U.S. metros year over year. That means, according to the latest MagnifyMoney research, that renters looking to upgrade to a two-bedroom may be able to do so for cheaper.
That, of course, depends on where you live. Here’s what we found.
Three Midwest metros – Cleveland, Indianapolis and Columbus, Ohio – saw the largest year-over-year percentage increases in pricing for one-bedroom apartments. Rounding out the top five were St. Petersburg, Fla., and Reno, Nev.
The metros with the largest year-over-year percentage decreases were more varied in location, with the Northeast, Midwest, West and South all represented. Two of the bottom five cities are in Texas.
Meanwhile, while looking at the largest year-over-year percentage increases in pricing for two-bedroom apartments, the Northeast and Midwest each have two metros among the top five, with the South taking the other spot.
As for the metros with the largest year-over-year percentage decreases, the West took four spots (California occupied three), while New York took one.
Moving closer to your workplace can lower the cost of commuting, as can working from home. But in some metros, the cost of rent is so high that cutting a commute wouldn’t be enough to cover a rent increase.
The following examples illustrate how moving closer to work – or working from home – can save enough money to break even on a rent increase and where a shorter commute won’t do the trick.
To be clear: There are additional factors beyond the added cost of rent, including utilities, public transportation costs and more, but this can provide a glimpse.
If your office is closed due to social distancing measures (some offices have remained permanently closed) during the COVID-19 pandemic, moving to a two-bedroom apartment with room for a proper office can help cut down on stress and keep you feeling productive.
If you’re planning on having a child in the near future, you’ll likely want to upgrade to a bigger apartment so the baby can have a nursery or to create a quiet place to work from home.
It’s OK to be excited to spread your wings and feel a bit homesick at the same time. If you’ve made a big move and live far from loved ones, you may want an apartment with room for a guest bedroom that Mom or your bestie can crash in when they visit. The more the merrier.
Sarah Berger, MagnifyMoney’s millennial finance columnist, said you should generally not spend more than 30% of your gross income on rent. If you’ve recently received a pay raise and can still afford to allocate 30% of your income on rent, you could afford the higher cost. That being said, Berger warns to be wary of lifestyle creep. “Just because you can afford to pay for a bigger or more expensive place doesn’t mean you should,” she said.
Researchers analyzed July 2020 apartment and rent data from Zumper to estimate the cost of moving from a one-bedroom to a two-bedroom in the 100 largest metros in the U.S. metros were ranked from highest to lowest based on percentage difference. The AAA average cost per mile for 15,000 miles a year – 62 cents – was used to calculate the breakeven points.