Renters fled overpriced NYC and Chicago for ‘affordable’ cities… But some destinations aren’t so cheap any more – and the transplants are feeling the strain

During and after the Covid-19 pandemic, a wave of young people left major metropolitan areas like New York City and Chicago in search of cheaper alternatives to big city living.

But exclusive data compiled by Zillow for the Daily Mail shows that in the small cities that benefited from the migration, median rents have surged higher and are starting to strain the transplants’ budgets.

‘Sun Belt markets have long attracted residents with warm weather and relative affordability, but the surge of newcomers since the pandemic has put significant upward pressure on rents,’ Zillow & StreetEasy Senior Economist Kenny Lee told the Daily Mail.

Take Charleston, South Carolina – a booming coastal city where the population grew 7.6 percent between 2020 and 2024. 

Rents in Charleston have surged 32.5 percent since August 2021, one of the sharpest increases among the cities analyzed, and they’re still climbing at an annual rate of 4.2 percent.

South Carolina gained around 53,734 new residents in 2024, with Gen Z accounting for 32 percent of people moving to the state from elsewhere in the US, according to StorageCafe. 

Zonda Economics forecasting another 9.1 percent increase by 2029. But as more people pile into cities like Charleston, those affordability advantages are beginning to erode.

The typical asking rent in Charleston is now $2,062 a month, up $506 from $1,556 in August 2021, according to Zillow. 

Ben Kriegsman, vice president of capital markets at Lion Real Estate Group, said the increase is being driven in large part by a mismatch between demand and the supply of new apartments. 

‘Completions in Charleston fell more than 70 percent from their 2024 peak and construction starts collapsed, so steady population and job growth is running into very little new product,’ Kriegsman told the Daily Mail.

The influx of newcomers in 2021 and 2022 added to demand, Kriegsman said, but continued population growth, job growth and household formation are now putting pressure on a market where relatively little new housing is coming online.

That has set Charleston on a very different trajectory from some of the other cities that became magnets for Americans during the pandemic.

Austin, for example, has seen rents fall by around 8 percent since mid-2023, according to research from economist Aziz Sunderji, founder of Home Economics.

Migration to Austin slowed between 2021 and 2024 while apartments approved during the earlier boom began flooding onto the market, creating a mismatch between supply and demand.

Sunderji described it as a ‘timing mistake’ by developers who responded to the extraordinary surge in demand during the pandemic without knowing how quickly it would cool.

Austin is not alone.

San Antonio, Denver, Phoenix and Dallas have also seen rents decline from recent peaks, with Sunderji finding that cities with falling rents generally experienced high housing valuations alongside a slowdown in migration.

Typical asking rents in Austin are now $1,622 a month – essentially unchanged from a year ago and 1.6 percent below August 2021 levels.

Dallas rents are up just 0.4 percent over the past year and 11.2 percent since August 2021, while Denver rents have fallen 0.6 percent year-over-year and are up 9.5 percent since 2021.

Miami, like Charleston, has also seen a steep increase, with rents up 27.8 percent since August 2021 to $2,666 a month, although annual growth has slowed to 1.6 percent.

The contrast shows that the Sun Belt’s affordability story is becoming increasingly uneven.

Some cities responded to the pandemic-era influx by building thousands of new apartments, eventually leaving them with more housing than they currently need.

Others, particularly smaller lifestyle markets, did not add enough new homes in the places where people wanted to live.

Kriegsman said larger Sun Belt metros including Atlanta, Dallas-Fort Worth, Charlotte and Nashville built at a record pace during the boom, helping keep rents flat or even push them lower as new supply arrived.

Dallas-Fort Worth added more than 33,000 units in a single year, he said, while rents have been flat or falling since late 2023.

Atlanta has only recently returned to positive rent growth, at around 0.2 percent, after two years of declines.

Charleston’s problem is that its supply response has been much weaker.

While population and jobs continue to grow, apartment completions have fallen sharply from their 2024 peak and construction starts have collapsed, leaving renters competing for a relatively limited pool of homes.

That does not necessarily mean younger renters are abandoning Charleston altogether. Instead, rising costs can push them farther from the areas they originally wanted to live in.

Alexei Morgado, a Florida real estate agent and founder of Lexawise, said renters may respond to rising costs by moving into smaller homes, taking on roommates or relocating farther from urban centers.

In Charleston, he said, development is increasingly shifting toward North Charleston, Summerville and Goose Creek, where housing is cheaper and more than 1,000 units are under development.

‘From the real estate standpoint, this is what affordable erosion means: the metro keeps pulling people in, but their affordable area is now further out,’ Morgado told the Daily Mail.

That can mean renters save on housing but give some of those savings back through longer commutes and transportation costs.

Morgado also pointed to Philadelphia and Tampa as examples of how different supply cycles can produce very different rent trends.

Philadelphia is seeing rent growth as demand remains strong while new supply stays limited in key submarkets. Tampa, meanwhile, is still working through a wave of apartments delivered after the pandemic-era boom, which has helped push rents lower.

‘Therefore, the acceleration in Philadelphia should not be interpreted as increased migration. It is a supply timing issue, rather,’ Morgado said.

Morgado said Charleston could continue to lose some of its affordability advantage, but that does not necessarily mean rents will approach New York levels.

Instead, rising rents can eventually change the behavior that drives demand in the first place, with renters downsizing, sharing housing or moving farther away.

‘The most critical moment does not come when Charleston “catches up” with New York; it comes when the rent difference is no longer big enough to motivate people to move there,’ he said.

Kriegsman cautioned against attributing Charleston’s entire 32.5 percent rent increase to migrants or higher-income newcomers.

‘There’s no dataset that can reliably assign the share of the 32 percent to higher-income newcomers,’ he said.

‘Migration mattered most in 2021 and 2022. Since then the driver has been more local. Job growth, household formation and, above all, what is happening to supply greatly impact the pricing narrative.’

For renters, that can mean making compromises before leaving the city altogether.

People facing higher rents often move into smaller apartments, take on roommates, renew their existing lease rather than move or accept a longer commute, Kriegsman said.

Lower-income renters and longtime residents can be particularly exposed to the squeeze, especially when newcomers arrive with greater purchasing power.

Kriegsman said the key issue is not simply how much rents rise, but how much of a household’s income is already going toward housing.

A 5 percent increase may be manageable for someone spending 25 percent of their income on rent, he said, but can become much more painful for someone already spending 40 percent.

Still, Charleston remains considerably cheaper than New York City. The typical asking rent of $2,062 is less than half the $5,295 average rent for a Manhattan apartment in June 2026, according to Corcoran.

But that affordability gap is narrowing. A Charleston renter is now facing a typical asking rent that is $506 higher than it was in August 2021, while the city’s population and job base continue to grow.

And the same dynamic could play out in other smaller markets that have attracted new residents while their apartment pipelines begin to shrink.

Kriegsman pointed to Savannah, Georgia, and Huntsville, Alabama, as two smaller markets worth watching as renter populations grow and new construction tapers.

The larger Sun Belt markets may also be approaching another turning point.

Kriegsman said Atlanta now has less than 3 percent of its apartment inventory under construction, down from more than 8 percent at its peak, while Nashville’s pipeline has fallen by roughly two-thirds from its high.

Nationally, apartment deliveries in the second quarter were at their lowest level since 2022, while construction starts were roughly 75 percent below their 2022 peak, he said.

That could eventually mean another shift in the rent cycle.

The cities that spent years adding apartments to keep up with pandemic-era migration may soon have fewer new homes coming online just as population and job growth continue.

Kriegsman expects rents in some of those markets to begin firming again in 2027 and 2028.

The result is a housing landscape that is becoming harder to characterize simply as a mass migration to ‘cheap’ Sun Belt cities.

Some places that attracted Americans with lower rents have managed to preserve that advantage by building aggressively.

Others have seen housing costs surge as demand outpaced new construction.

And in some markets, the building boom that temporarily made rents cheaper could now be fading.

‘In many of these markets, the affordability advantage that made them so appealing in the first place has been eroded by the very demand they attracted,’ Lee said.