Tracking rents is important for understanding the dynamics of the housing market. For example, the sharp increase in rents helped me deduce that there was a surge in household formation in 2021 (See from September 2021: Household Formation Drives Housing Demand). Now that household formation has slowed, and multi-family completions have increased, rents are under pressure.
Welcome to the March 2024 Apartment List National Rent Report. The rental market turned a corner in February; after six consecutive months of rent declines, prices ticked up 0.2 percent this month and today the nationwide median rent stands at $1,377.1 This turnaround is in line with the rental market’s typical seasonal pattern, as we transition into the time of year when moving activity starts to gradually pick back up after bottoming out around the holidays.
Rents are up 0.2% month-over-month, down 1.0% year-over-year
Rent growth follows a seasonal pattern – rent increases generally take place during the spring and summer, whereas the fall and winter usually see a modest price dip. We are currently transitioning between slow and busy seasons, as rents fell for six consecutive months from August 2023 to January 2024, but ticked up 0.2 percent in February.
On a year-over-year basis, rents nationally are down 1 percent. Year-over-year rent growth dipped below zero last June for the first time since the early stages of the COVID-19 pandemic, and has now been in negative territory for nine consecutive months. After prices skyrocketed in 2021 and 2022, the pendulum has been swinging back a bit over the past year as price growth has been kept in check by sluggish demand colliding with a robust supply of new inventory hitting the market. That said, the recent dip does not equate to a reversal of the earlier price hikes - the national median rent is still 20 percent higher than it was three years ago.
[A]fter bottoming out in October 2021, vacancies have been opening up steadily for over two years. As of February, our vacancy index sits at 6.6 percent, the highest reading since September 2020. And there’s good reason to expect that it could rise even further in the year ahead. Despite a recent slowdown in new permits being issued and new construction projects breaking ground, the number of multifamily units under construction remains near record levels. …
emphasis added
Realtor.com: Sixth Consecutive Month with Year-over-year Decline in Rents
In January 2024, the U.S. median rent continued to decline year-over-year for the sixth month in a row, down -0.3% for 0-2 bedroom properties across the top 50 metros, a pace slower than the -0.8% seen in December 2023. The median asking rent was $1,712, down by $1 from last month. Despite the six months of decline, the U.S. median rent was just $46 (-2.6%) less than the peak seen in August 2022. Notably, it was still $265 (18.3%) higher than the same time in 2020 (pre-pandemic).
CoreLogic: “Single-family rental prices grew by 2.8% year over year”
Apartment rent growth hovered just above stagnant in January, as has been the case since August 2023. Rents for professionally managed apartments ticked up a minor 0.3% in the year-ending January 2024, with change measured on a same-store basis.
Rent Data
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