Median National Monthly Rent Approaches $2K
Asking rents, however, are slowing, perhaps a sign that the Fed is ably fighting inflation.
The median monthly asking rent in the US is nearly $2,000, according to national data published this week by Redfin.
Rents rose 15% year over year in April—representing the tad lower 17% rate from March’s increase—and now sit at $1,962.
Leading the way were Austin, Portland and South Florida—all seeing its rents spike by more than 30%.
Redfin Chief Economist Daryl Fairweather said that the fact that rents are growing at a slower pace “may be a very early sign that the Fed’s tactic of raising interest rates to quell inflation is working. However, rents are still growing at nearly double the rate of overall inflation. Landlords in hot migration destinations [are thriving].”
Renter Renewal Rates, Rents Spiking
Last week, RealPage analyst Kim O’Brien reported that more than 57% of market-rate renters with an expiring lease renewed during the past 12 months, up 3.5 percentage points YoY, according to its clients’ rent rolls. This represents a boost from retention rates of 51.5% recorded between 2010 to 2019, before those soared during the pandemic.
Additionally, renters renewing leases in April paid 10.7% more compared to their previous lease.
“That’s a large increase, but substantially below the 18.7% hike a typical new renter paid compared to previous residents of the same unit,” O’Brien reported.
“Renewal rent is increasing much faster at 11% to 12% in the more expensive Class A and Class B segments, which generally cater to higher-income renters. In the lower-cost Class C segment where affordability plays a bigger role, renewal rents increased 7.1%—well below headline inflation of 8.3%.”
Redfin added that rents fell in April compared to a year earlier in only three of the 50 most-populous metro areas: Milwaukee (8%); Kansas City (4%) and Minneapolis (2%).