Asking Rents Mostly Unchanged Year-over-year

Another monthly update on rents.

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.

Apartment List: Asking Rent Growth -0.7% Year-over-year

From ApartmentList.com: Apartment List National Rent Report

Rents are up 0.4% month-over-month, down 0.7% year-over-year

Welcome to the July 2024 Apartment List National Rent Report. Rent prices ticked up for the fifth straight month, but rent growth over the course of 2024 as a whole remains modest, signaling ongoing sluggishness in the market. The national median rent increased by 0.4% in June and now stands at $1,411, but the pace of growth slowed slightly this month. This is typically the time of year when rent growth is accelerating amid the busy moving season, so sluggish growth this month indicates that the market is headed for another slow summer.

Since the second half of 2022, seasonal declines in rent prices have been steeper than usual and seasonal increases have been more mild. As a result, apartments are on average slightly cheaper today than they were one year ago. Year-over-year rent growth nationally currently stands at -0.7 percent and has now been in negative territory since last summer. But despite this cooldown, the national median rent is still more than $200 per month higher than it was just a few years ago.

On the supply side of the market, our national vacancy index remains slightly elevated, currently standing at 6.7 percent. After a historic tightening in 2021, multifamily occupancy has been slowly but consistently easing for over two years. And with this year expected to bring the most new apartment completions in decades, we expect that there will continue to be an abundance of vacant units on the market in the year ahead.

Realtor.com: Tenth Consecutive Month with Year-over-year Decline in Rents

From Realtor.com: May 2024 Rental Report: Slower Decline in Rents Suggests Inflation May Continue

In May 2024, the U.S. median rent continued to decline year over year for the 10th month in a row, down 0.7% for 0-2 bedroom properties across the top 50 metros, on par with the rate seen in April 2024. The median asking rent was $1,732, up by $10 from last month following a typical seasonal trend. 

Despite the 10th month of decline, the U.S. median rent was just $24 (-1.4%) less than the peak seen in August 2022. Notably, it was still $306 (21.5%) higher than the same time in 2019 (before COVID-19), but this increase is roughly on par with what has occurred in overall consumer prices (up 22.7% in the five years ending April 2024) and pales in comparison with the 52.7% increase in the median price per square foot of for-sale home listings in the five years ending May 2024.

CoreLogic: “Rent growth for attached properties (such as condominiums) continue to lose steam”

CoreLogic also tracks rents for single family homes: US Single-Family Rent Growth Levels Off in April, CoreLogic Reports

• Single-family rental gains were up by 3% in April from a year ago, while the March to April increase was above average.

• Rent growth for attached properties (such as condominiums) continue to lose steam, posting a year-over-year decline of -0.5%.

The 3.0% YoY increase for single-family homes in April was down from 3.4% YoY in March.

Rent Data

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