According to a new report from Realtor.com, national rents fell again in April, with the biggest drops occurring in Austin, Texas, Las Vegas, and San Francisco compared to when those markets peaked.
Realtor.com’s Rental Report notes that some areas, especially those with low unemployment numbers and a slow pace of new construction builds, saw record-high rents that could continue to rise into the summer months.
Nationally, the median rent for all sizes of apartments fell by 0.7% year-over-year to $1,723 and also decreased across all size categories. This is the ninth straight year-over-year drop, though the pace of rent declines has slowed. Rents are just $33 (-1.9%) below their August 2022 peak.
“In the ever-fluctuating real estate market, renters will find that trends vary significantly by location,” said Danielle Hale, Chief Economist at Realtor.com. “Renters in some historically expensive areas are seeing lower prices compared to what they would have paid at the peak of the market, while many relatively affordable markets are witnessing a continued rise in rental costs to new highs, and the scales could tip to even more markets later this summer.”
Renters in some South and West markets see biggest savings; Austin leads the way
In Austin, Texas, the median asking rent was $1,494, down $195 (or 11.5%) from its peak in September 2022. That’s the largest percent savings, compared to the market’s peak, among the 50 biggest metro markets. The decline was partly driven by an influx of new multi-family homes into the Southern market, which has helped to push Austin’s rental vacancy rate higher. Rents in Austin have been declining month-over-month since June 2023. Still, April’s median asking rent in Austin is $260 (21.1%) more than it was five years ago, before the pandemic.
The metropolitan area with the second biggest decline was Las Vegas, where renters could save $184 on average by renting a typical property, down 11.1% from the June 2022 high.
Las Vegas was followed by San Francisco, where a typical renter could save $303 per month, or down 9.9% from the July 2022 peak.
Three Midwest metros hit record-high rents and more could follow
In contrast, rents are climbing in some parts of the Midwest. The median asking rents hit their highest levels since March 2019 in three Midwest cities: Indianapolis (up 4.5% annually to $1,334), Milwaukee (up 3.8% to $1,671), and Minneapolis (up 2.5% to $1,529). Driving higher rents are below-average unemployment rates and the slow pace of new multi-home construction. Current rental prices in Cincinnati, Cleveland and Chicago are all slightly below peak but could hit their own record highs this summer if the recent growth trend continues. While rents in many Midwest metro areas are generally more affordable than in cities in other parts of the country, in some key markets renters are facing increasing affordability challenges.
Rents decline across all size categories
The average, national, price for an apartment of any size is now $1,723, down 0.7% year-over-year. Over the last five years this number is up 22.5%
An average studio apartment is demanding a market value of $1,443, down 1.7% year-over-year and up 18.9% over the last five years.
A one-bedroom apartment now goes for $1,601, down 1.4% year-over-year, but up 20.9% over five years.
A two-bedroom apartment (the largest size Realtor.com tracks) is going for $1,916 at the current market rate, down 0.7% year-over-year and up 24.4% over the last five years.
Click here for the report in its entirety, including statistics for the top-50 metropolitan areas.
