The mean rent in San Francisco is $1,669, San Jose is $1,429 and Los Angeles, $1,422. M/PF YieldStar data shows tenants in many other cities also paying in the quadruple-digit range every month. In Manhattan, condos and co-ops average $1.3 million, and rents average $3,142 a month, according to data supplied by Citi Habitats, a New York residential broker. New York also has seen condo prices explode. New York City is the most expensive place to rent an apartment in the United States � $2,400 a month on average (through December 31), according to Reis Client Services. Many of the places where rents are rising the fastest are in very hot housing markets. 'Not only that,' he says, 'but lenders are tightening up their lending criteria, leading to fewer qualified buyers.' High home prices and rising interest rates mean that hundreds of thousands of potential homebuyers cannot afford to buy a single-family home or condo, according to Brad Inman, founder of Inman News Service, which covers the real estate industry. Those renters by necessity will probably be joined by many more over the next months. 'Many people used to be renters by choice. 'There has been a big cut in the number of higher income renters' says Willett. The higher end of the rental market took an especially hard hit during the housing boom as more affluent Americans saw the value of buying real property as an investment as well as a place to live. David Lereah of the National Association of Realtors is predicting home price increases around 5% for 2006 � about the same amount that rents will rise. The soft rental market coincided with the housing boom, which drew millions of Americans into home ownership, reducing the demand for apartments.īut the hot home market is cooling off this year. Home prices appreciated at an average of nearly 9 percent a year from 2001 to 2005, far surpassing increases in rents, which averaged only 2 or 3 percent a year.

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