Redfin Reports U.S. Asking Rents Ticked Up for Second Straight Month in May, Hitting Highest Level Since 2022
June 11 2024 - 8:30AM
Business Wire
The median asking rent climbed 0.8% year over
year to $1,653 — just $47 below the record high. Washington, D.C.,
Cincinnati and Chicago all saw double-digit increases.
(NASDAQ: RDFN) —The median U.S. asking rent rose 0.8% year over
year in May to $1,653 — the highest level since October 2022,
according to a new report from Redfin (redfin.com), the
technology-powered real estate brokerage. That’s the second
consecutive increase (rents climbed 0.9% year over year in April)
following 11 months of decreases. Rents rose 0.5% on a
month-over-month basis.
Apartment prices are closely tied to apartment supply.
Multifamily construction surged during the pandemic moving frenzy,
which pushed rent prices down because building owners were
competing for tenants. While multifamily building starts have
fallen below their 10-year historical average, there’s still a
backlog of new units that are hitting the market every month, which
is putting a lid on how much prices can grow.
“Demand from young renters remains high, as many of them are
opting to stay put rather than contend with an increasingly
unaffordable homebuying market,” said Redfin Senior Economist
Sheharyar Bokhari. “But so far, rent price growth has been limited
because there are enough new apartments to meet demand, even in the
busiest time of year for the rental market.”
For the past three quarters, the rental vacancy rate has hovered
at 6.6%. That’s the highest level since 2021, though it’s worth
noting that the vacancy rate is no longer growing like it was
during the pandemic.
While asking rents ticked up in May, they’re stable compared to
recent years; they rose as much as 17.5% year over year during the
pandemic, and then fell as much as 4.1% this past summer. Still,
the median asking rent in May was just $47 below (-2.8%) August
2022’s record high of $1,700, posing affordability challenges for
some renters.
Rents Are Posting Double-Digit Gains in Washington, D.C., But
Falling in the Sun Belt
In Washington, D.C., the median asking rent rose 11.1% year over
year in May — the biggest jump among the 33 major U.S. metropolitan
areas Redfin analyzed. Four other metros saw double-digit gains:
Cincinnati (10.9%), Chicago (10.8%), Virginia Beach, VA (10.3%) and
Minneapolis (10.3%).
The biggest asking rent declines were in Jacksonville, FL
(-10.1%), San Diego (-8.7%), Austin, TX (-7.2%), Seattle (-5.9%)
and Phoenix (-5.5%).
Rents are falling in the Sun Belt in part because the region has
been building more apartments than other parts of the country (like
the Midwest and Northeast) to meet demand brought on by the influx
of people who moved in during the pandemic. But the pandemic
housing boom is now in the rearview mirror, and property owners are
facing vacancies, which is causing rents to cool.
Meanwhile, rents are rising in many Midwest metros because the
region hasn’t been building as many apartments. The Midwest is also
the most affordable region to live in, which helps bolster demand
at a time when housing affordability is strained across most of the
U.S.
To view the full report, including charts, metro-level data and
methodology, please visit:
https://www.redfin.com/news/asking-rents-highest-since-2022
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240611740227/en/
Redfin Journalist Services: Kenneth Applewhaite
press@redfin.com
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