Redfin Reports Asking Rents Are Inching Closer to Their Record High
- Record high asking rent of $2,038 in July, just $16 below the record set in August 2022
- Rent growth remains sluggish, up just 0.3% from a year earlier in July compared to 13.6% annual gain in July 2022
- Increase in supply, economic uncertainty, and slowing household formation contributed to cooled rent gains
- The West saw a 1.1% year-over-year drop in asking rent to $2,451, while the Northeast and Midwest saw record increases
- None.
The West is the only region seeing a drop in asking rents, which are coming back down to earth after surging a record
While rents are just shy of their all-time high, rent growth remains sluggish. The median asking rent was up just
Rent gains cooled over the past year due to an increase in supply, economic uncertainty and slowing household formation, but big bargains are still often hard to come by given rents are near record highs.
“While rents are flattening out, it’s too early to say whether rent growth has bottomed,” said Redfin Deputy Chief Economist Taylor Marr. “A strong job market, cooling inflation and increasing consumer spending—which have decreased the likelihood of a recession—point to resilient renter demand. But there are still a lot of newly built apartments that have yet to hit the market, meaning rents may still have room to fall as landlords grapple with rising vacancies.”
The median asking rent is near its record high because the housing market tends to be “downside sticky,” meaning prices don’t typically fall substantially even when business is slow, Marr added. Instead of lowering rents, many landlords offer perks like a free month’s rent or discounted parking, which tend to be less detrimental to profits.
The number of options renters have to choose from has steadily climbed over the past decade. Completed residential projects in buildings with five or more units rose
But there are signs that the homebuilding boom is easing. The number of permitted residential projects in buildings with five or more units fell
Rents Fall in the West, Rise in the Midwest and Northeast
In the West, the median asking rent fell
The rental market has cooled quickly in the West and South in part because those markets saw outsized rent increases during the pandemic. Rents skyrocketed as people flooded into Sun Belt cities including
While rents in the West and South have been relatively sluggish, it’s worth noting that these regions’ rental markets have started to stabilize in recent months as the impact of the pandemic price boom moves further into the rearview mirror and layoffs ease.
To view the full report, including charts, please visit:
https://www.redfin.com/news/redfin-rental-report-july-2023
About Redfin
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View source version on businesswire.com: https://www.businesswire.com/news/home/20230810119830/en/
Redfin Journalist Services:
Kenneth Applewhaite, 206-588-6863
press@redfin.com
Source: Redfin
FAQ
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