Renters across the US are getting some relief as rental prices fall for the first time in two years.
A new study from real estate website Realtor.com shows the median rent nationwide fell 0.5% in May from a year ago, the first dip over the trailing 12 months since the pandemic erupted in 2020.
“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,” Realtor.com Chief Economist Danielle Hale said in a statement. “Although still modest, a decline in rents combined with cooling inflation and a still-strong job market is definitely welcome news for households.”
The median rent for an apartment with two bedrooms or less was $1,739 in May, down from a high of $1,777 in July of 2022, according to the study.
Still, the cost of renting an apartment remains considerably higher than it was before the pandemic. The typical rent is about 25% higher, or $344, than it was in 2019, the data shows.
Realtor.com calculated US median rent for studio, one-bedroom and two-bedroom apartments across the 50 largest US metropolitan areas.
Rental prices in major cities across the US dropped steeply in 2020 as mostly white-collar workers fled to smaller, less-populated towns. But prices surged in 2021, reversing the trend, as return-to-office orders and school re-openings drew individuals and families back to larger cities.
Rents are still rising in the Midwest
While the US median rent has dropped, rental prices aren’t trending down in every region. In the Midwest, rents were up 4.5% in May from a year ago, according to Realtor.com. Rents climbed the highest year over year in Columbus, Ohio (9.3%); St. Louis, Missouri (7.7%); and Cincinnati (7.7%).
However, the rate at which rents are climbing has moderated across the US over the past year. While rent growth for single-family homes in April increased an average of 3.7% from a year ago, itaccording to real estate research firm CoreLogic.
Realtor.com predicts the median asking rents will fall 0.9% by year’s end.
“Looking forward, we expect to see a continued, albeit small, year-over-year decline in rental prices throughout the remainder of the year,” Hale said. “Renters may find themselves with more bargaining power and may have better luck finding an affordable unit this year.”