‘Astronomical’ Rent Growth 'May Be Behind Us,' Says Realtor.com

Apartment rent growth continues to slow based on recent reports this week from Redfin and Realtor.com. Grabbing the headlines now are the markets where rents are falling.

Redfin said that was the case for October in 11 major metros, with the largest drops in Milwaukee, Minneapolis and Baltimore.

The median U.S. asking rent in October rose 7.8% year over year to $1,983, the smallest annual increase since August 2021, that real estate brokerage reported.

Realtor.com reported that October saw the slowest pace of rent growth in 18 months.

Its monthly report showed that nationally rent growth slowed to 4.7% year-over-year, with the median U.S. rent hitting $1,734.

Landlords Forecast Continued Hikes for 2023

Nonetheless, according to The Avail, by Realtor.com®, 2022 Fall Landlord and Renter Survey found that while tenants are still struggling with affordability, the majority of landlords are planning increases in the next 12 months, albeit less than before.

Danielle Hale, Chief Economist at Realtor.com, said in prepared remarks, “Our data indicates that we are finally starting to see a bit of relief from the double-digit pace of rent growth that we experienced during the height of the pandemic.

“While it’s still a bit early to say that we’re officially on a downward trajectory for rent prices, the data shows a promising return toward normal seasonal slowdowns and suggests that the astronomical price gains of the past several years may be behind us.”

‘It’ll Be a While’ Until Renters See Meaningful Relief

Redfin’s October report marked the second-straight month of single-digit rent growth following roughly a year of double-digit gains.

It was also the fifth-consecutive month in which annual rent growth decelerated, with rents rising at about half the pace they were six months earlier. Rents declined 0.9% on a month-over-month basis.

Redfin Deputy Chief Economist Taylor Marr said in prepared remarks, “Economic uncertainty is prompting many renters to stay put, and persistent inflation is shrinking renter budgets. That’s causing rent growth to cool. There are signs that inflation is starting to ease, but it will likely be a while before renters see meaningful relief given that rents are still up more than wages.”

Redfin had Oklahoma City rents jumping 31.7% year over year in October, the biggest increase among the 50 most populous metros. It was followed by Raleigh, NC (21%), Cincinnati (17%), Louisville, KY (15.8%) and Indianapolis (15.1%).