A new study from Redfin has found that the median U.S. asking rent rose 0.4% year-over-year to $1,607 in February—the first increase in six months and the biggest in nine months. On a month-over-month basis, asking rents climbed 0.6%.
Though asking rents may have inched up in February, they have remained relatively flat for the past 10 months, compared to the large swings of the past few years. Rents skyrocketed as much as 18% year-over-year during the pandemic moving frenzy in 2021, and then fell as much as 4% in 2023. Asking rents are now flattening because rental supply and demand are near equilibrium.
“The era of big rent declines is over for most of the country,” said Redfin Senior Economist Sheharyar Bokhari. “A ton of new apartments have hit the market, and demand for those apartments is strong because it’s so expensive to buy a home. But apartment construction is starting to slow, which means there may be more renters than apartments to go around as soon as next year. That could cause rents to tick up and the perks that many renters have grown accustomed to—like free parking—to disappear.”
Where Are Rents Falling?
In Austin, Texas, the median asking rent dropped 9.4% year-over-year in February to $1,404—the largest decline among the 44 major U.S. metropolitan areas that Redfin analyzed. It’s now 22% below its August 2023 record high. Salt Lake City, Utah ranked second in largest declines (-7.8%), followed by Jacksonville, Florida (-6.7%); Minneapolis, Minnesota (-5.9%); and San Diego, California (-5.6%).
Asking rents have been falling quickly in parts of Texas and Florida because those states have been building more housing than other states. Florida has also been grappling with intensifying natural disasters, which has made some people hesitant to live there.
A recent report from Point2Homes found that Arizona and Florida each have nearly 14,000 single-family rentals in the pipeline.
With the single-family rental market undergoing a shift, as rent growth moderates, vacancy rates rise, and regional trends diverging, Rentometer’s 2024 National Single-Family Rentals Report found that Miami Beach, Florida ($6,567) was the only non-California city to rank among the most expensive small rental markets.
Redfin found that rents rose the most in Cincinnati, Ohio (15.3%); Providence, Rhode Island (12.4%); Baltimore, Maryland (9.6%); Washington, D.C. (9.2%); and Cleveland, Ohio (8.5%).
Asking Rents Tick Up for Smaller Apartments
In terms of larger versus smaller rental spaces, Redfin analysts found that the median asking rent for zero- to one-bedroom apartments rose just 0.4% year-over-year to $1,467—the first increase since June. The median asking rent for two-bedroom apartments rose 0.6% to $1,689—also the first increase reported since June.
The median asking rent for three-plus bedroom apartments fell 0.5% to $1,990, marking the smallest decline in months.
Click here for more on Redfin’s analysis of the nation’s rental trends.
