U.S. Rental Market Shows Stability as Asking Rents Remain Steady
The U.S. rental market continues to show stability as the median asking rent remained little changed from a year earlier for the sixth consecutive month, according to a report by Redfin, the technology-powered real estate brokerage. The median asking rent in September rose by 0.4% year over year to $2,011. This comes after a period of rapid rent growth during the pandemic, followed by a slowdown in prices.
The steady rental market can be attributed to an increase in the number of rentals available, making it harder for landlords to raise prices. The surge in apartment building in recent years has flooded the market with supply, balancing out the demand for rentals. Additionally, high mortgage rates have kept many potential homebuyers and sellers on the sidelines, contributing to the demand for rentals.
Although construction of new apartments continues to rise, there are signs of a slowdown. The number of apartment buildings on which construction has started declined by 41% year over year. This could eventually help bolster rent prices as supply becomes more limited.
Landlords are facing increased competition as new rentals enter the market, including individual homeowners who choose to rent out their homes instead of selling. Some landlords are offering concessions, such as a free month’s rent, to attract tenants without lowering asking rents on paper.
The Midwest saw the highest increase in median asking rent, rising by 5% year over year to a record $1,436. The Northeast also experienced an increase, with the median asking rent climbing by 3.1% to $2,482. In contrast, the West and South saw declines in asking rents, falling by 1.6% and 0.3% respectively.
While the West and South rental markets initially experienced a rental boom during the pandemic, prices have cooled down as supply increased. The West, in particular, has been impacted by tech layoffs, contributing to a sluggish rental market. However, recent months have shown signs of stabilization as the impact of the pandemic price boom diminishes and layoffs ease.
Overall, the U.S. rental market remains relatively stable, providing good news for renters. Despite the increase in supply, the median asking rent is still only 2.1% below its record high. As construction slows and demand for rentals continues, it will be interesting to see how rent prices evolve in the near future.
For more information and detailed charts, please refer to the full report by Redfin.
Redfin is a technology-powered real estate company that offers brokerage, rentals, lending, title insurance, and renovations services. They aim to help people find a place to live and sell homes for more money while charging a lower fee compared to traditional brokerages. Redfin serves over 100 markets across the U.S. and Canada, employing over 5,000 people.
To learn more about Redfin and their services, visit their website at www.redfin.com.