7 SC cities where rent is rising fastest. Where it’s hitting hardest and why it could get worse
It’s been a painful time for many renters across parts of South Carolina lately.
Year-over-year rent growth has continued to decelerate nationwide and while parts of South Carolina have followed that trend, multiple cities in the state apparently didn’t get the memo. Rent in several South Carolina cities currently show double-digit year-over-year increases, according to the latest data from rent.com. And continued high demand for housing in the state, coupled with the threat of new federal interest rate increases, could mean even higher rent jumps this year, some industry experts say.
South Carolina rent prices
Unlike national rent growth, some South Carolina cities have seen double-digit increases over the past year, according to rent.com.
Here is a list of South Carolina cities where rent has jumped by double digits for an average, one-bedroom apartment, year-over-year. The list shows average rent as of Sunday, followed by the annual percent increase.
- Columbia: $1,117 — 10%
- West Columbia: $1,380 — 51%
- Greenville: $1,442 — 15%
- Summerville: $1,420 — 18%
- Myrtle Beach: $1,670 — 18%
- Orangeburg: $850 — 89%
- Sumter: $982 — 32%
Why rent is still high
Rent rates have risen overall the last two years much like housing prices for many of the same reasons, industry experts say. A combination of low inventory and high demand due to increases in population and job growth have driven prices up for most types of housing.
Low inventory and high demand has been a particularly large problem for South Carolina and can explain much of why rent costs have risen more in certain parts of the state than the national average. South Carolina has seen an influx in new residents overall compared to many other states. According to more recent, preliminary Census data, South Carolina was the third fastest-growing state in 2022.
U.S. rent market now
Year-over-year rent growth has continued to decelerate and is currently at 2.6 percent, its lowest level since April 2021, according to the Apartment List national rent report for March. Year-over-year growth is now pacing slightly below the average rate from 2018 to 2019 (2.8 percent) and is likely to decline even further in the months ahead.
Rent nationally did increase by 0.5% nationally month over month in March, the report adds.
Federal interest rates and SC rent
The most recent inflation estimates, released last week, show that the annual U.S. inflation rate has continued to drop — down to 5% as of March from its peak of 9.1% in June 2022. But while this is positive, the U.S. has a long way to go to return to the Federal Reserve’s target inflation rate of of 2%, said Joey Von Nessen, research economist at Moore School of Business at University of South Carolina.
“The decline in the inflation rate so far has been almost exclusively driven by the goods sector, with prices in the service sector continuing to rise,” Von Nessen said. “For inflation to approach 2.0%, price levels must moderate in both the goods sector and the services sector.”
So, what does this have to do with South Carolina rent?
Well, the Federal Reserve will likely raise interest rates at least one more time this year to fight inflation. Von Nessen said that one of the consequences of steady interest rate hikes seen over the past year has been an increase in cost for big-ticket items that people borrow money to purchase, such as homes. And when people can’t buy homes, they turn to the rental market.
“This increase in demand for rentals, in turn, raises rental rates,” Non Nessen said. “Thus, further rate hikes in 2023 are likely to continue to increase the costs of all types of housing – whether renting or buying.”
