Rent prices fell 0.5% year-over-year, their first drop since the start of Realtor.com® rental data trend tracking in 2020
SANTA CLARA, Calif., June 26, 2023 /PRNewswire/ — The Realtor.com® May Rental Report found that renters are beginning to see some relief, with the median asking monthly rent in the 50 largest US metros decreasing -0.5% year-over-year to $1,739. Nationally, rent prices increased $3 from last month, but were down $38 from the July 2022 peak. Realtor.com®‘s 2023 Forecast Update predicts that rents will continue to drop, averaging -0.9% from 2022.
“In May, we saw the first year-over-year decline in rents, a sea-change from the double-digit growth that renters competed with in much of 2021 and 2022. This is yet another sign that rental-driven inflation is likely behind us, even though we may not see this trend in official measures until next year,” said Realtor.com® Chief Economist Danielle Hale. “Although still modest, a decline in rents combined with cooling inflation and a still-strong job market is definitely welcome news for households.”
While rental declines are a positive sign for household affordability, it is important to note that rents are still $344 (+24.7%) higher than the same time in 2019, before the pandemic began.
“Despite the decline in typical asking rents, households who may not have moved in several years are likely to see their rents increase if they’re looking for a new home,” said Hale.
Western markets seeing the biggest rent drops
Rent prices in the expensive West are seeing the largest year-over-year declines (-3.0%), with the South close behind (-1.0%). More affordable Midwestern markets continued to increase (4.5%), but at a much slower pace than in previous months. Rent in the Northeast have stayed relatively strong, as low unemployment rates and relatively slow new construction improvements have kept demand high and supply limited. Densely populated markets like New York City (+6.8%) and Boston (+3.3%) have shown resilience.
Expectations for the second half of 2023
In some good news for renters, Realtor.com® anticipates that rents will continue to drop, averaging -0.9% year-over-year in 2023. Strong multi-family new construction has helped to improve the availability of units, which is helping to improve prices. This, combined with a number of renters choosing to stay in their units longer in order to save money, will help to reduce rental market competition through the end of the year.
“Looking forward, we expect to see a continued, albeit small, year-over-year decline in rental prices throughout the remainder of the year. Renters may find themselves with more bargaining power and may have better luck finding an affordable unit this year. Meanwhile, landlords looking for help setting rents in a shifting market can find tools from Realtor.com®‘s Avail,” said Hale.
Rental Data – 50 Largest Metropolitan Areas – May 2023
Metro | Median Rent 0-2 bedrooms | YOY 0-2 bedrooms |
Atlanta-Sandy Springs-Roswell, Ga. | $1,660 | -3.1 % |
Austin-Round Rock, Texas | $1,641 | -5.6 % |
Baltimore-Columbia-Towson, Md. | $1,850 | 2.0 % |
Birmingham-Hoover, Ala. | $1,261 | 3.1 % |
Boston-Cambridge-Newton, Mass. -NH. | $2,832 | 3.3 % |
Buffalo-Cheektowaga-Niagara Falls, NY. | NA | NA |
Charlotte-Concord-Gastonia, NC-SC. | $1,576 | -3.5 % |
Chicago-Naperville-Elgin, Ill. -Ind. -Wisc. | $1,714 | -1.0 % |
Cincinnati, Ohio-Ky-Ind. | $1,218 | 7.5 % |
Cleveland-Elyria, Ohio | $1,215 | -1.0 % |
Columbus, Ohio | $1,329 | 9.3 % |
Dallas-Fort Worth-Arlington, Texas | $1,542 | -3.6 % |
Denver-Aurora-Lakewood, Colo. | $1,969 | -3.0 % |
Detroit-Warren-Dearborn, Mich. | $1,323 | 5.1 % |
Hartford-West Hartford-East Hartford, Conn. | NA | NA |
Houston-The Woodlands-Sugar Land, Texas | $1,434 | 2.0 % |
Indianapolis-Carmel-Anderson, Ind. | $1,331 | 7.3 % |
Jacksonville, Fla. | $1,559 | 2.3 % |
Kansas City, Mo. -Kan. | $1,308 | 3.1 % |
Las Vegas-Henderson-Paradise, Nev. | $1,531 | -6.0 % |
Los Angeles-Long Beach-Anaheim, Calif. | $2,833 | -2.6 % |
Louisville/Jefferson County, Ky. -Ind. | $1,210 | 7.2 % |
Memphis, Tenn. -Miss. -Ark. | $1,325 | 0.2 % |
Miami-Fort Lauderdale-West Palm Beach, Fla. | $2,341 | -2.3 % |
Milwaukee-Waukesha-West Allis, Wisc. | $1,597 | 6.2 % |
Minneapolis-St. Paul-Bloomington, Minn. -Wisc. | $1,511 | 1.2 % |
Nashville-Davidson–Murfreesboro–Franklin, Tenn. | $1,618 | -0.7 % |
New Orleans-Metairie, La. | NA | NA |
New York-Newark-Jersey City, NY-NJ-Penn. | $2,911 | 6.8 % |
Oklahoma City, Okla. | $997 | 4.6 % |
Orlando-Kissimmee-Sanford, Fla. | $1,769 | -2.3 % |
Philadelphia-Camden-Wilmington, Penn.-NJ-Del.-Md. | $1,823 | 1.3 % |
Phoenix-Mesa-Scottsdale, Ariz. | $1,663 | -5.7 % |
Pittsburgh, Penn. | $1,450 | 3.8 % |
Portland-Vancouver-Hillsboro, Ore. -Wash. | $1,680 | -1.3 % |
Providence-Warwick, RI-Mass. | NA | NA |
Raleigh, N.C. | $1,558 | -2.9 % |
Richmond, Va. | $1,448 | 4.9 % |
Riverside-San Bernardino-Ontario, Calif. | $2,302 | -5.9 % |
Rochester, New York. | NA | NA |
Sacramento–Roseville–Arden-Arcade, Calif. | $1,847 | -3.5 % |
San Antonio-New Braunfels, Texas | $1,276 | 0.2 % |
San Diego-Carlsbad, Calif. | $2,966 | -0.6 % |
San Francisco-Oakland-Hayward, Calif. | $2,844 | -4.0 % |
San Jose-Sunnyvale-Santa Clara, Calif. | $3,347 | 1.0 % |
Seattle-Tacoma-Bellevue, Wash. | $2,112 | -1.8 % |
St. Louis, Mo. -Ill. | $1,327 | 7.7 % |
Tampa-St. Petersburg-Clearwater, Fla. | $1,793 | -4.0 % |
Virginia Beach-Norfolk-Newport News, Va.-NC. | $1,436 | -1.6 % |
Washington-Arlington-Alexandria, DC-Va.-Md.-WV. | $2,214 | 4.0 % |
Methodology
Rental data as of May 2023 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
With the release of its May rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since May 2023 will not be directly comparable to previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp NWS NWSA])) [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
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SOURCE Realtor.com