After three years of booming, prices in the rental market have finally started to cool down across much of the US, with a number of cities experiencing significant declines, according to the latest data.
Las Vegas took the top spot nationwide for cities where rental prices are tumbling the most, with a 6 percent drop in the year to May—the latest data available—according to Realtor.com. It was followed by Riverside, California, with a 5.9 percent decline in rental prices from May 2022 to May 2023 and Phoenix, Arizona, with a 5.7 percent slide in the same period.
These are the 10 cities where rental prices have fallen the most, according to Realtor.com data.
1. Las Vegas, NV (Median rent price: $1,531; year-on-year change -6.0 percent)
2. Riverside, CA (Median rent price: $2,302; year-on-year change -5.9 percent)
3. Phoenix, AZ (Median rent price: $1,663; year-on-year change -5.7 percent)
4. Austin, TX (Median rent price: $1,641; year-on-year change -5.6 percent)
5. Tampa, FL (Median rent price: $1,793; year-on-year change -4.0 percent)
6. Charlotte, NC (Median rent price: $1,576; year-on-year change -3.5 percent)
7. Atlanta, GA (Median rent price: $1,660; year-on-year change -3.1 percent)
8. Denver, CO (Median rent price: $1,969; year-on-year change -3.0 percent)
9. Seattle, WA (Median rent price: $2,112; year-on-year change -1.8 percent)
10. Virginia Beach, VA (Median rent price: $1,436; year-on-year change -1.6 percent)
“Rental prices are falling mostly in areas where the local economy is easing more significantly,” Jiayi Xu, an economist at Realtor.com, told Newsweek.
“Pandemic hot-spots in the South and West saw rapid rent growth over the last few years and now that rental demand has been pulled back, rental prices have started to fall,” she added.
“In addition, we are seeing an increase of new rental supply, especially in the West, where the pace of new multifamily completion in the first quarter nearly doubled the pace in the same time last year, dampening the competition and leading to a larger drop in rent prices.”
Despite the significant drops in these cities, rental prices remain relatively high. Monthly rents dipped by 0.5 percent year-on-year in May, according to Realtor.com—the first time rental prices in the US have declined since 2020.
Analysts at Realtor.com estimate that rents will only dip by 0.9 percent this year nationwide, a modest decrease.
“We expect to see rents fall year-over-year at a national level in 2023. Depending on the specific market, rents may fall more or less compared to the national trend,” Xu explained. “In more affordable areas with still-strong economies, we expect to see rents fall slower, if at all, this year.”
But Xu added that, in areas more affected by rapidly declining affordability, “rents will likely continue to fall until they reach the level that drums up rental demand.”