Rental Relief: Exploring the Decline in Rents Across the U.S.
Are you looking for a new place to rent? If so, you might be in luck. According to a recent report by Realtor.com, rents have been falling for eight months in a row, thanks to a surge of new apartment supply across the country.
The report found that the median asking rent in December 2023 was $1,713, down 0.4% from a year ago. That's the first annual decline since 2017, and a sign that renters are getting some relief from the high housing costs that have plagued them for years.
But not all renters are benefiting equally from this trend. The report also revealed that rents vary widely by region, type of property, and whether you are staying put or moving to a new place.
Here are some key takeaways from the report:
- The West and South regions saw the biggest drops in rents, as new apartment construction outpaced demand. The West region had a 5.4% annual decline in rents, while the South region had a 2.9% decline.
- The Northeast and Midwest regions saw steady rent growth, as demand exceeded supply. The Northeast region had a 4.8% annual increase in rents, while the Midwest region had a 3.6% increase.
- Rents for smaller properties (0-2 bedrooms) fell more than rents for larger properties (3+ bedrooms), as more renters sought more space amid the pandemic. Rents for 0-2 bedroom properties fell by 1.1% annually, while rents for 3+ bedroom properties rose by 1.6%.
- Rents for existing tenants rose more than rents for new tenants, as landlords tried to retain their current renters and attract new ones with discounts and incentives. Rents for existing tenants rose by 2.9% annually, while rents for new tenants fell by 1.5%.
What does this mean for you?
If you are looking for a new place to rent, you might have more options and bargaining power than before, especially if you are looking in the West or South regions, or for smaller properties.
If you are staying in your current place, you might want to shop around and compare prices with other similar properties in your area, as you might find a better deal elsewhere.
The report also suggested that rents will continue to fall in 2024, as more new apartments come online and add to the inventory. Danielle Hale, chief economist at Realtor.com, said in an interview with Yahoo Finance Live: “There's a lot of supply in the pipeline. So we expect to see this softening trend continue. And that's going to give renters’ incomes a chance to catch up.”
You can watch the interview with Danielle Hale here:
You can read the original article that inspired this blog post here: https://finance.yahoo.com/news/rents-will-continue-to-fall-due-to-a-lot-of-supply-in-the-pipeline-economist-says-183929627.html
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