Understanding North Carolina’s Rental Market: Are Rental Costs Keeping up with Inflation?

Upon completion of a recent article reviewing housing values across the state, we discovered that inflation adjusted median housing values increased in 77% of North Carolina’s counties since 2014.  This made us wonder if rental costs would follow the same pattern.  The best data available to measure this is median rent (Table DP04), which includes rent and utility costs, from the US Census Bureau’s American Community Survey (ACS).  Median rent indicates that half of all renters pay more while the other half pay less.

North Carolina Rental Market

To understand what is happening at a statewide level, we reviewed ACS statewide 1-year estimates.  We discovered that inflation-adjusted median rent estimates have increased each year from 2014 to 2023, representing an increase of more than 20% over the study period.  Note that ACS did not release a 1-year estimate for 2020 and the BLS’s CPI-U was used to inflate estimates to 2023 values.

Figure 1. NC Median Rent (1-year estimates, 2014-2023)

Source: Created by LEAD Staff using data from U.S. Census Bureau American Community Survey, 1-year estimates 2014-2023; Adjusted for inflation using the Consumer Price Index (CPI-U); 1-year estimates were not provided for 2020.

Is this increase in rent experienced across the state?

While 1-year estimates would be the best data point to help us understand what is happening at the county level, these estimates are not available for all 100 NC counties.  We turn to the 5-year estimates to gather information on all 100 counties and learn whether the growth is occurring to median rent in each county.

Figure 2. Comparison of County Median Rent (2018 and 2023 5-year Estimates)

Source: NC Department of Commerce calculations using U.S. Census Bureau American Community Survey, 5-year estimates; 2018 & 2023

Our analysis revealed that, when adjusted for inflation, 83 NC counties experienced an increase in median rent.  No counties saw a decrease and 17 saw the median rent hold steady when comparing the 2018 and 2023 5-year estimates.

The counties that experienced steady median rent include:

While these 17 counties are distributed throughout the state, they do share some similarities.

1. They are all located in rural areas and only one, Gates, is in a Metropolitan Statistical Area (MSA).
2. They have smaller populations.  The county in this list with the largest population, Person, is the 63rd largest.  Eight of the counties rank in the bottom 15 largest counties.

Conclusion

North Carolina's rental market tells a tale of two economies. While median rent has outpaced inflation statewide by more than 20% from 2014 to 2023, this growth is far from uniform across the state's 100 counties.

The 83 counties experiencing rent increases are predominantly in metropolitan and suburban areas.   Meanwhile, the 17 counties with steady rents share distinct characteristics: they're rural, have smaller populations, and sit outside major metropolitan statistical areas—except for Gates County.

What's particularly noteworthy is that population decline doesn't explain steady rents in these rural counties. Nearly half gained population between 2014 and 2023, suggesting that other factors may be at play.

This analysis is limited by the 5-year average data, which could potentially understate recent growth in median rent.  The statewide data shows rent increases accelerated significantly after 2021and it remains to be seen whether the 17 "steady rent" counties will maintain their stability or begin following the broader state trend as these recent changes work through the housing market.