August 2024 marks the 13th month of year-over-year rent decline in a row for 0-2 bedroom properties observed since trend data began in 2020. Asking rents dipped by $5, or -0.3%, year over year.
The median asking rent in the 50 largest metros registered at $1,753, down by $2 from last month and $7 lower than its August 2022 peak.
Median rent declined in all size categories with larger declines in smaller-sized units: Studio: $1,455, down $20 (-1.4%) year over year; 1-bed: $1,632, down $11 (-0.7%) year over year; 2-bed: $1,941, down $5 (-0.3%) year over year.
Affordability
In August 2024, nationwide rent was slightly more affordable than in the previous year. Renters earning the typical household income devoted 25.1% of their income to lease a typical for-rent home (vs. 25.9% in August 2023). Meanwhile, renting a starter home continues to be a more affordable option than buying one.
Despite the improved top-level trend, affordability varies widely and did not improve everywhere.
6 of the top 50 metros had a rent share higher than 30% relative to the median household income. Miami, FL, was the least affordable rental market in August 2024. The median rent for a typical 0-2 bedroom unit in Miami is 1.4 times as high as the estimated maximum affordable rent for the median household.
Oklahoma City, OK, is the most affordable rental market in August 2024. The median rent for a typical 0-2 bedroom unit was just 61% of its estimated maximum affordable rent.
Affordability eroded most in more affordable Midwest markets such as St Louis, MO, Cincinnati, OH, and Minneapolis, MN, which saw faster rent growth.
In August 2024, the U.S. median rent continued to decline year over year for the 13th month in a row, down $5, or -0.3%, year over year for 0-2 bedroom properties across the top 50 metros, slighlty faster than the rate of -0.1% seen in July 2024. The median asking rent was $1,753, down by $2 from last month, reflecting a similar seasonal trend observed in the for-sale market.
Despite the 13th month of decline, the U.S. median rent was just $7 (-0.4%) less than the peak seen in August 2022. Notably, it was still $293 (20.1%) higher than the same time in 2019 (pre-pandemic), but this increase is roughly on par with what has occurred in overall consumer prices (up 22.7% in the five years ending August 2024) and pales in comparison to the 51.0% increase in median price per square foot of for-sale home listings in the five years ending July 2024. Further, the relative steadiness in rents should translate into slower shelter inflation in the months ahead, alleviating one of the biggest recent drivers of rising prices.
Figure 1: Rents Decline Again, but Nationwide Rent Is Just 0.4% Below 2022 Peak
All units saw rent declines
In August 2024, the median asking rent for two-bedroom units dropped -0.3%, a larger dip than the rate seen in July, and the 15th consecutive month of annual declines. The median rent for two bedrooms was $1,941 nationally, $20 (-1.0%) lower than the peak seen in August 2022. Nevertheless, larger-unit rents had the highest growth rate over the past five years, up by $345 (21.6%).
The rent for one-bedroom units slipped -0.7% in August 2024 on a year-over-year basis, marking the 15th decline in a row and also a faster pace compared with the decline of -0.4% in July. The median rent was $1,632, $26 (-1.6%) lower than the peak observed during August 2022, but still $251 (18.2%) higher than in August 2019.
In August 2024, the median asking rent for studios fell by -1.4%, marking the 13th consecutive month of annual declines. The median rent of studios was $1,455 in August, down by $35 (-2.3%) from its peak seen in October 2022. Nevertheless, the median asking rent for studios was still $179 (14.0%) higher than five years ago.
Figure 2: All Units Saw Waning Rent Declines
Table 1: National Rents by Unit Size
Unit Size Median Rent Rent YoY Rent Change – 5 years
Overall $1,753 -0.3% 20.1%
Studio $1,455 -1.4% 14.0%
1-bed $1,632 -0.7% 18.2%
2-bed $1,941 -0.3% 21.6%
Rental affordability improved from a year ago
One approach to measuring rental affordability is the 30% rule of thumb. According to this rule, a household should spend no more than 30% of its gross income on housing costs. The U.S. Department of Housing and Urban Development uses this approach. HUD defines cost-burdened households as those paying more than 30% of gross income on housing (including utilities) and severely cost-burdened households as those paying more than 50% of income on rent (including utilities).
This report uses a rent share of income to measure rental affordability in August 2024. It compares the median monthly rents with the estimated median monthly household income. A higher value means that rental costs make up a more significant proportion of the typical household income every month, indicating a relatively less affordable rental market. Meanwhile, a lower share implies a much healthier housing environment.
In 2024, the average median monthly household income among the top 50 metros was $6,985 and the monthly median listed rent for units with 0-2 bedrooms was $1,753 in August, suggesting rents made up 25.1% of a typical household income. In August 2023, the rent-to-income share was 25.9%, showing that, for the median household, the nation’s rental affordability has improved over the past year as rent prices have dipped and typical incomes have grown. Looking ahead, as long as the trend of year-over-year rental declines persists, we can anticipate ongoing improvement in rental affordability over the course of the year.
