Rents just hit another record high after a 12% surge in January

• Renting is getting more expensive everywhere.
• In January, renters paid $1,374 on average for a one-bedroom unit.

Renting is getting more expensive everywhere. Prices are rising at an alarming pace, and new data suggests rental affordability will falter in 2022.

In January, US renters paid $1,374 on average for a one-bedroom unit, according to Zumper. That's a 12% increase from last year when renters only needed to pay around $1,217. This growth marks a new record and highlights just how fast rents are climbing. In 2021 and 2020, rents increased only 0.6% and 0.3% year over year in January, respectively.

"For the national index to move by double digits takes incredible price increases everywhere, and that's exactly what we're seeing," Zumper researchers wrote.

After steadily growing in 2021, inflation in December was the strongest in almost four decades. Americans are feeling the burden in their wallets, especially in relation to housing costs. Housing affordability has been on the decline for years and inflation isn't helping. As priced-out buyers forsake homeownership, the rental market is likely to become even more expensive in the months to come.

"These still-rising prices also reflect a pre-existing housing shortage that will likely continue to push rent up in 2022," Zumper researchers wrote.

A shortage of homes is driving rent prices up

The housing market is short 5.24 million homes and new-home construction remains at its slowest pace since 1995. The decline in homebuilding is putting additional pressure on costs, pricing out many would-be buyers.

In 2021, the median home sales price increased 16.9% from 2020, marking the highest on record going back to 1999, according to the National Association of Realtors. Home sales also increased 8.5%, which is the strongest year since 2006. Frustrated with costs and increased competition, many buyers are returning to the rental market.

The Census Bureau indicates in 2020, prior to the CDC's moratorium on evictions and prices, 34.7% of homes were rented. By the end of 2021, the rate reached 36%, according to iproperty management, a renting database. As the rental market experiences an uptick in traffic, prices have begun to increase across the country.

"Rising demand is giving landlords the latitude to push rents higher, especially as new supply was also hampered by pandemic quarantines," George Ratiu, Realtor.com senior economist, told Forbes.

As growth in home building remains lackluster, the National Association of Homebuilders reports that tens of thousands of dollars have been added to the price of a new home, while costs for new apartments have jumped as well.

"Recent NAHB analysis shows that higher costs for lumber products have added nearly $30,000 to the price of an average new single-family home and raised the rental price of a new apartment unit by more than $90," said Robert Dietz, NAHB chief economist.

Affordability is declining for both homeowners and renters. As more Americans say no to homeownership, rental prices could set more records in 2022.