Apartment Rent Growth Cools, Suggesting Slowdown Is Near

Apartment rent growth grew at its slowest rate since February, though rents continue to buck seasonal trends. 

Apartment List’s national rent index ticked up by 0.8% from September to October, the least growth since the beginning of this year. And 22 of the nation’s 100 largest cities saw rents fall this month, after a nearly six-month stretch of uninterrupted growth. 

Boise, long hailed as a pandemic rents leader, saw the biggest decline, with prices down 3.1% in October. The slump means the Idaho city will relinquish its title as the country’s fastest spot for rent growth since the pandemic began. (That spot now belongs to Tampa, where rents are up 36% over March 2020 levels.)

The national median rent rose to $1,312 from September to October, $107 greater than where Apartment List researchers say it would be if rent growth over the past year and a half had been in line with growth rates observed in 2018 and 2019.

Since January, national median rents have gone up by 16.4%.

But the latest city-by-city data suggests that a slowdown is on the horizon⁠—if not already here. 

“Nationally, and in nearly all individual cities across the country, rent growth in 2021 has exceeded average growth rates from pre-pandemic years. This month however, that record-setting growth is finally showing signs of a meaningful slowdown,” Apartment List’s Chris Salvati says in a new analysis. “Although growth is still exceeding pre-pandemic trends, our vacancy index ticked up for a second straight month and month-over-month rent growth came in at less than one-third of its July peak. While the market remains extremely tight, we’re now seeing the first signals of that pressure beginning to ease.”

Many of the 22 cities where prices have cooled are expensive coastal markets: prices fell by 1% in San Francisco, 0.4% in San Jose, and 0.1% in Oakland, and they also fell in Minneapolis, Boston, Seattle, and Arlington

“If this month’s slowdown is indicative of what’s to come, the San Francisco Bay Area may be settling into a new normal in which prices lag pre-pandemic levels for some time to come. And even for the cities on this list that have already seen rents rebound back to their March 2020 levels, this month’s data could be a sign that growth will continue to lag the national average going forward,” Salvati writes.