Feb 24, 2024 - Real Estate

Twin Cities rents are softer for the rich

Change in asking rent by apartment type, Q4 2022 to Q4 2023
Data: CoStar; Note: CoStar rates multi-family buildings on architectural design, structure, amenities, site and certifications; Chart: Alice Feng/Axios

Rent was up for middle-tier Twin Cities apartments at the end of 2023, according to real estate firm CoStar Group, which rates buildings based on design, amenities, location and certifications.

Why it matters: Renters with the deepest pockets are more likely than others to score a deal.

The big picture: Demand for more affordable apartments is helping to keep middle-of-the-road rent prices elevated, Jay Lybik, CoStar's national director of multifamily analytics, tells Axios.

Yes, but: A flood of new construction is pushing down U.S. rents at the high end, where there are often more apartments than renters who want them.

State of play: While the country needs more housing, most new apartments are loaded with amenities in prime locations.

  • Some of the Twin Cities' recently built high-rises offer indoor pools, saunas and pet decks.

Reality check: Rents in the Twin Cities grew slower than other big metros, but they're still pinching a large share of renters.

  • One in every four Twin Cities renters spends at least half of their income on rent and utilities, according to a new Harvard report, which notes the squeeze is especially hard on those with lower incomes.

Of note: The prices you see in the headlines are asking rents, meaning new leases only.

Go deeper: Housing was wildly unaffordable for half of renters in 2022, report shows

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