Average rent: $1,635

Annual increase:

6.8 percent

Unemployment rate:

10.6 percent

Proximity to Silicon Valley and a tight supply of real estate make San Jose the market where rents are likely to rise the most in 2011. Hot companies like Google and Facebook are priming the local economy, and the high cost of homes means renting is the only option for younger or lower-income workers. That’s pushing up rents.

Average rent: $3,038

Annual increase:

6 percent

Unemployment rate:

8.4 percent

The financial industry is recovering and the overall economy in New York City is relatively strong, which has kept the city’s unemployment rate below the national average. Plus, the high cost of owning makes New York a prime rental market, with about two-thirds of city residents renting their homes. New York remains one of the few places in the United States where people are willing to pay a steep premium to live.