The issue of housing rent in the United States continues to be a troubling one for renters due to its continuous rise. According to Realtor.com’s latest report, in April 2023, average rents in the top 50 US metropolitan areas increased 0.3% year-over-year for 0-2 bedroom properties, the fastest growth rate. Epidemic. The median asking rent was $1,734, up $4 from the previous month and $43 below the peak, but still $348 (25.1%) higher than the same period in 2019 (before the pandemic).
As per the report, the rental market experienced single-digit growth for the ninth consecutive month after fifteen months of deceleration from a growth peak of 16.4% in January 2022.
Realtor.com says, “A major factor contributing to this sharp downturn is record new construction of multi-family homes, resulting in an increase in rental inventory.”
“Additionally, the rental vacancy rate has reached its highest point since the first quarter of 2021, sitting at 6.4% in the first quarter of 2023. As more new rental properties are added to the market, we Estimates suggest that the rate will continue to rise gradually back to 7.2%, which was the norm from 2013-2019, as conditions for renting homes improve, the report said.
Despite the slowdown in annual rent growth, concerns about affordability continue to grow. Nearly 90% of respondents to the most recent Fannie Mae National Housing Survey believed home rental prices would not improve over the next 12 months, indicating a bleak outlook for the end of 2022.
In December 2022, 86% of renters believed that rental prices would not improve over the next 12 months. In April 2023, 66% thought they would go up, 12% thought they would go down, and 21% of those surveyed believed they would stay the same over the next 12 months. About 1% of those surveyed answered with ‘I don’t know’.
Reports suggest that rents are increasing rapidly in smaller units.
Rent by Size:
Study: $1,444, up 2.1% year-over-year ($30)
1 bed: $1,618, up 1.2% year-over-year ($19)
2 Bedroom: $1,936, an increase of 0.9% ($17) year-over-year.
Rents are growing faster in the Midwest (4.9% year-over-year), while rents in the West (-2.6% year-over-year) and Sunbelt markets (-2.5%) were lower than a year ago.
With rents rising for new tenants, many chose to avoid higher costs by renewing their leases, resulting in reduced tenant mobility.
