Redfin Reports Rents Drop to Lowest Level in a Year

Rhea-AI Summary

The median U.S. asking rent rose 1.7% year-over-year to $1,937 in February, marking the smallest increase in almost two years. This slow growth is attributed to high housing costs and rising supply, with the number of apartments under construction up 24.9% to 943,000, the highest since 1974. February also saw a 0.3% month-over-month decline in rent, continuing a nine-month trend of slowing growth. While some areas experienced rent decreases, such as Austin and New Orleans, others like Charlotte saw increases. Landlords are adjusting to higher vacancies and may offer concessions to attract renters.

Positive

• Median U.S. asking rent reached $1,937, showing stability amid slower growth.
• Number of apartments under construction rose 24.9% to 943,000, indicating a robust supply.

Negative

• Rent growth has slowed for nine consecutive months, now only 1.7% year-over-year.
• Rents fell 0.3% month-over-month, reflecting decreased demand.

The median U.S. asking rent is up just 1.7% from a year ago—the smallest gain in nearly two years—as landlords grapple with vacancies due to still-high rental costs and rising supply

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) —The median U.S. asking rent rose 1.7% year over year to $1,937 in February—the smallest increase in nearly two years and the lowest level in a year, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Rents were up nearly 10 times that much (16.5%) a year earlier.

February was the ninth straight month in which rent growth slowed on a year-over-year basis. Rents fell 0.3% from a month earlier. Still, the median asking rent remained 21.4% higher than it was in February 2020, the month before the coronavirus was declared a pandemic.

Rent growth has cooled as persistently high housing costs, inflation, recession fears and a slowdown in household formation have made people less likely to move, putting a damper on demand for new leases. A jump in supply due to a boom in apartment construction has also contributed to the slowdown in rent growth. The number of apartments under construction is up 24.9% year over year to 943,000, the highest level since 1974, according to a recent report from the National Association of Home Builders.

“Landlords are slowing their roll on rent increases because they’re grappling with a rise in vacancies as an influx of new apartments hits the market and demand slows from its peak,” said Redfin Deputy Chief Economist Taylor Marr. “Rents are likely close to hitting a floor, though. That’s because stubbornly high inflation is boosting expenses for landlords, so instead of dropping rents they may seek to lure renters with other concessions, like free parking or a discounted security deposit.”

Marr continued: “While rent growth has slowed, it hasn’t slowed quite as much as expected—in part because the labor market has held up better than anticipated, which has helped prop up demand. This is likely a reason overall inflation remains stubbornly high, as rent growth is a major contributor to inflation.”

Rents Declined in 11 Major U.S. Metro Areas

1. Austin, TX (-6.5%)
2. New Orleans, LA (-6.4%)
3. Phoenix, AZ (-4%)
4. Minneapolis, MN (-3.5%)
5. Dallas, TX (-2.6%)
6. Baltimore, MD (-2.2%)
7. Houston, TX (-1.9%)
8. Birmingham, AL (-0.5%)
9. Chicago, IL (-0.5%)
10. Denver, CO (-0.3%)
11. Virginia Beach, VA (-0.2%)

Raleigh Saw the Largest Rent Increase

1. Charlotte, NC (14.3%)
2. Columbus, OH (12.6%)
3. Milwaukee, WI (9.5%)
4. Nashville, TN (9.0%)
5. Indianapolis, IN (8.5%)
6. Kansas City, MO (8.3%)
7. Hartford, CT (6%)
8. Buffalo, NY; Providence RI (5.9%)
9. Cincinnati, OH; Louisville, KY; Memphis, TN (5.5%)
10. Riverside, CA; San Diego (5.3%)

To view the full report, including charts, full metro-level breakouts and methodology, please visit: https://www.redfin.com/news/redfin-rental-report-february-2023/

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/20230310005119/en/

Redfin Journalist Services:

Kenneth Applewhaite, 206-588-6863

press@redfin.com

Source: Redfin

FAQ

What is the median asking rent for February 2023 according to RDFN?

The median U.S. asking rent increased to $1,937 in February 2023.

How much did the median rent increase year-over-year in February 2023?

The median rent increased by 1.7% year-over-year in February 2023.

What trend is observed in rent growth over the past months?

Rent growth has slowed for nine consecutive months.

What factors are contributing to slowing rent growth for RDFN?

High housing costs, inflation, recession fears, and increased supply are contributing to the slowdown.

Which U.S. metro area saw the largest rent increase in February 2023?

Charlotte, NC, saw the largest rent increase at 14.3%.