Apartment rents are rising fast, boosted by young professionals returning to cities and an expensive housing market that keeps many of them renting.

Stock prices of publicly traded apartment companies have jumped in stride. The FTSE Nareit Equity Apartments

index, which tracks these landlords, is up 42% since January, trouncing the S&P 500’s 17% gain during the same period.

Median rent has risen more than 10% over the past year, according to home-search website Apartment List, reflecting how soaring housing prices are forcing many would-be home buyers out of the for-sale market. As of June, median existing-home sales prices are up 23.4% from a year earlier to $363,300—a record high, according to the National Association of Realtors.

Job losses at the beginning of the pandemic initially hurt rent collection. Occupancy rates dropped to new lows for some landlords. Major markets like New York and San Francisco had double-digit declines in asking rent, sending apartment stock prices tumbling.

An expanded version of this story appears on WSJ.com

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