Realtor.com® December Rental Report: Rents Continued to Fall as New Construction Outpaced Rental Demand
Rhea-AI Summary
Realtor.com's December Rental Report shows that rents declined for the 17th consecutive month, dropping -1.1% year-over-year to a median of $1,695. This marks the first time since April 2022 that the national median asking rent fell below $1,700.
The rental market is showing signs of balance as the nationwide absorption rate fell to 55%, matching 2019 levels. While overall inflation has increased 22.8% since 2019, rents have only risen 16%. The Northeast region maintains the highest absorption rates, increasing from 58% to 67%, while the West saw the largest decline, dropping from 72% to 58%.
Notable market changes include significant rent decreases in Memphis (-6.7%), Denver (-5.9%), and Austin (-5.0%). However, affordable rentals continue to show stronger demand with a 56.3% absorption rate compared to 53.8% for pricier units.
Positive
- Market stabilization with absorption rates returning to pre-pandemic levels (55%)
- Rent growth (16%) has remained below inflation (22.8%) over the past five years
Negative
- 17 consecutive months of rent declines (-1.1% YoY)
- Eight out of 11 Western markets reported YoY rent declines
- Significant rent decreases in major markets (Memphis -6.7%, Denver -5.9%, Austin -5.0%)
News Market Reaction 1 Alert
On the day this news was published, NWS gained 1.78%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
"We are reaping the benefits of the multi-family surge in housing starts that lasted throughout 2023, but as starts and completions slow we anticipate seeing more balance in the rental market ahead," said Danielle Hale, chief economist at Realtor.com®. "For renters, balance is welcome and signals an end to the pandemic era rental market spikes."
Strong Rental Supply Growth Helps Bring Market Closer to Balance
Strong rental supply growth in recent years has returned the market to a more balanced state as the nationwide absorption rate, the share of newly built rental units that are successfully leased out within three months of completed construction, fell to
Absorption rate is not the only signal of a move into balanced market territory. The influx of new multi-family construction is helping bring balance to the rental market, especially when looking at the change in rents over the last five years and the inflation rate. Since 2019, overall inflation has increased
Balance Lags for Affordable Rentals
More supply is helping ease the high demand seen during the height of the pandemic years; however, absorption rates for affordable rentals show stronger demand for these properties than for more expensive ones. The weighted average absorption rates within three months of completion were
Apartments Continue to Fill Fast in the Northeast while the West saw Falling Absorption
Regionally the Northeast has the highest absorption rates and is the only area experiencing a higher absorption rate in the third quarter of 2024 compared to the same period last year, rising from
The West experienced the largest decline in absorption rates within the first three months of completion, dropping from
Table One: National Rents by Unit Size
Unit Size | Median Rent | Rent YoY | Rent Change - 5 Years |
Overall | -1.1 % | 16.0 % | |
Studio | -1.3 % | 11.3 % | |
1-Bedroom | -0.9 % | 15.9 % | |
2-Bedroom | -0.9 % | 19.8 % |
Table Two: Rental Data–50 Largest Metropolitan Areas–December 2024
Metro | Median Rent (0-2 | YoY Change (0-2 |
-2.9 % | ||
-5.0 % | ||
-0.4 % | ||
-2.4 % | ||
-0.5 % | ||
NA | NA | |
-2.2 % | ||
-2.8 % | ||
0.5 % | ||
-3.4 % | ||
0.7 % | ||
-4.1 % | ||
-5.9 % | ||
-0.2 % | ||
NA | NA | |
-2.3 % | ||
-0.5 % | ||
-1.0 % | ||
3.1 % | ||
-1.4 % | ||
-2.7 % | ||
1.2 % | ||
-6.7 % | ||
-1.0 % | ||
-1.2 % | ||
0.2 % | ||
-4.4 % | ||
NA | NA | |
5.3 % | ||
1.3 % | ||
-0.6 % | ||
-1.0 % | ||
-3.9 % | ||
-0.2 % | ||
1.0 % | ||
NA | NA | |
-2.4 % | ||
-0.8 % | ||
-4.8 % | ||
NA | NA | |
1.2 % | ||
-3.1 % | ||
-4.2 % | ||
-4.3 % | ||
3.3 % | ||
-1.3 % | ||
1.3 % | ||
-1.6 % | ||
-0.8 % | ||
2.1 % |
Methodology
Rental data as of December 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the 50 largest metropolitan areas. Realtor.com began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
Media Contact: Mallory Micetich, press@realtor.com
View original content:https://www.prnewswire.com/news-releases/realtorcom-december-rental-report-rents-continued-to-fall-as-new-construction-outpaced-rental-demand-302355387.html
SOURCE Realtor.com
FAQ
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