For five straight months apartment rents have dipped, with the latest numbers for September showing that overall prices were down 0.7% year over year, according to Realtor.com. It found that median asking rents in the 50 largest metros dropped to $1,747, down $29 from the peak seen in July 2022.
It is now more economical to rent than buy in nearly all of the major U.S. markets, according to Realtor.com Chief Economist Danielle Hale, although she notes that rent prices have remained well above pre-pandemic levels. Overall, rent has increased by 24% since July 2019, according to Realtor.com numbers.
The rental market is grappling with two opposing forces, Hale tells GlobeSt.com: strong demand especially as home ownership has moved out of the reach of many people and an abundant level of supply that continues to enter the market. Going forward, she says, “it is tough to say whether the demand or the supply will be the bigger influence on price.”
Currently, of course, the market trend is favoring renters. Median asking rents for two-bedroom units dropped for the fifth consecutive month, also by -0.7%, followed by a fourth straight month of declines for one-bedroom units, at -0.3% and a third consecutive month for studios at -0.5%, according to Realtor.com. Median asking rents for larger units remain the most elevated from pre-pandemic levels, with two-bedroom units renting for $403 more per month than they did four years ago, a 26.3% increase. Meanwhile, rents for studios are dropping at a slightly faster pace year-over-year than larger one-bedroom units.
How these dynamics will play out next year remains to be seen. Hale believes that rents will continue at a moderately soft pace for the better part of 2024. “The abundant supply will be the dominant factor, but not overwhelmingly so,” she says.