After rent prices jumped nearly 15% in 2021 throughout the U.S., there are indications rent prices are starting to subside.
According to the monthly Realtor.com Rental Report,the median rent price in the United States 50 largest metro areas was $1,739 in May, down from a peak of $1,777 in July 2022. Compared to the same time a year ago, the median rent price is now 0.5% lower.
The report also projects a 2023 decline of 0.9% in rent prices.
The report notes that rent prices still remain highly inflated compared to prior to the pandemic. The report says prices have gone up 24.9% over the last four years.
"In May, we saw the first year-over-year decline in rents, a sea-change from the double-digit growth that renters contended with in much of 2021 and 2022. This is yet another sign that rental-driven inflation is likely behind us, even though we may not see this trend in official measures until next year," said Realtor.com chief economist Danielle Hale. "Although still modest, a decline in rents combined with cooling inflation and a still-strong job market is definitely welcome news for households."
The report looks at rent prices for studio, one-bedroom and two-bedroom units. Data from property analytics firm CoreLogic has shown similar trends.
"It appears that rent growth is bottoming out, meaning that increases in single-family rents over the past three years are more or less permanent," said Molly Boesel, principal economist at CoreLogic. "The increases, especially at lower price levels, erode affordability and cause tenants to devote more of their monthly budget to rents, leaving fewer funds for other necessities."
Although rental prices are declining in many markets, 23 markets still noted more expensive rentals than a year ago.
These five markets had the largest increases, according to Realtor.com:
- Columbus, Ohio: 9.3%
- St. Louis: 7.7%
- Cincinnati: 7.5%
- Indianapolis: 7.3%
- Louisville, Kentucky: 7.2%
These five markets had the largest price decreases:
- Las Vegas: 6%
- Riverside/San Bernardino/Ontario, California: 5.9%
- Austin, Texas: 5.6%
- San Francisco: 4%
- Tampa/St. Petersburg: 4%
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