Redfin Reports Asking Rents Climb 11% in August, the Smallest Gain in a Year

Rhea-AI Summary

The latest report from Redfin indicates that U.S. asking rents reached a record high of $2,039 in August, marking an 11% year-over-year increase. However, this growth has moderated for the third month in a row, with only a 0.4% rise month-over-month, the slowest since December 2021. The Federal Reserve's interest rate hikes are expected to further slow rent growth as they dampen renters’ budgets. A significant rental supply is anticipated, with nearly one million units under construction. Cincinnati, Pittsburgh, Indianapolis, and Nashville saw the largest rent increases, exceeding 20%.

Positive

• U.S. asking rents reached record high of $2,039 in August, an 11% year-over-year increase.
• Cincinnati's asking rents rose 26%, the largest among major U.S. metros.

Negative

• Rent growth has slowed for three consecutive months, indicating a potential market cooling.
• The 0.4% month-over-month increase is the slowest growth since December 2021.

Rent growth is likely to keep slowing as rising interest rates continue to cool the economy

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —U.S. asking rents climbed to a record high in August, but rent growth moderated for the third-straight month. The national median asking rent was up 11% year over year to $2,039, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s the smallest annual increase in a year, down from a peak gain of 19% in March. On a month-over-month basis, the median asking rent climbed 0.4%, the slowest growth since December 2021 and down from a 1.6% increase a year earlier.

“Rent growth will likely slow further as the Federal Reserve continues to raise interest rates. Higher interest rates impact the rental market because they put a damper on spending power in the economy as a whole, including renters’ budgets,” said Redfin Deputy Chief Economist Taylor Marr. ”Growth in rents is also likely to be slowed by a boost in rental supply. There are nearly a million rental units under construction that will hit the market in the coming months and years.”

Rental Market Summary	August 2022	Month-Over-Month	Year-Over-Year
Median Monthly Rent	$2,039	0.4%	11.1%

Rents Rose More Than 20% in Cincinnati, Pittsburgh, Indianapolis and Nashville

In Cincinnati, asking rents rose 26% year over year in August, the largest jump among the 50 most populous U.S. metropolitan areas. Pittsburgh, Indianapolis and Nashville also saw increases of at least 20%. This was the first month since August 2021 that no metro area saw rents increase 30% or more from a year earlier.

Top 10 Metro Areas With Fastest-Rising Rents Year Over Year

1. Cincinnati, OH (26%)
2. Pittsburgh, PA (22%)
3. Indianapolis, IN (21%)
4. Nashville, TN (20%)
5. Portland, OR (19%)
6. New York, NY (18%)
7. Newark, NJ (18%)
8. Nassau County, NY (18%)
9. New Brunswick, NJ (18%)
10. San Antonio, TX (17%)

Four of the 50 most populous metro areas saw rents fall in August from a year earlier, up from three in July. Rents declined 15% in Milwaukee, 7% in Minneapolis, 2% in Jacksonville, FL and 1% in Baltimore. Milwaukee and Minneapolis have seen declining asking rents since April.

Metro Areas Where Rents Declined Year Over Year

1. Milwaukee, WI (-15%)
2. Minneapolis, MN (-7%)
3. Jacksonville, FL (-2%)
4. Baltimore, MD (-1%)

To view the full report, including charts and methodology, please visit:
https://www.redfin.com/news/redfin-rental-report-august-2022/

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220921005394/en/

Redfin Journalist Services:

Kenneth Applewhaite, 206-588-6863

press@redfin.com

Source: Redfin

FAQ

What is the current median asking rent according to Redfin for August 2022?

The median asking rent in August 2022 reached a record high of $2,039.

What does Redfin predict about rent growth in the future?

Redfin predicts that rent growth will likely slow further due to rising interest rates and increasing rental supply.

Which metro areas had the highest rent increases year-over-year in August 2022?

Cincinnati, Pittsburgh, Indianapolis, and Nashville saw rent increases of over 20% year-over-year.

How much did rents increase month-over-month in August 2022?

Rents increased by 0.4% month-over-month in August 2022.

What has been the trend in rent growth over the past few months?

Rent growth has moderated for three consecutive months, indicating slowing demand.