Apartment Rent Growth Is Now Negative YoY

This is the first month that rents have been negative year-over-year since the early pandemic, according to a new report by Apartment List.

Rents nationally are up 0.3% month-over-month but are down 0.7% year-over-year and are trending down for the season.

In pre-pandemic years, July rent growth averaged 0.6 percent. This stagnation indicates that the market cool down that started in the second half of 2022 is continuing, even as prices rise modestly month-over-month, the report said.

“This marks a major deceleration from recent years when annual rent growth neared 18 percent nationally and soared to over 40 percent in a handful of popular cities,” it said.

Perhaps more startling is that July is typically the prime moving season when rent growth has flourished.

But for the first time since 2020, property owners will compete for a smaller pool of tenants instead of the other way around, Apartment List pointed out.

Apartment List’s vacancy index reached 7.3 percent, its highest level since the height of the pandemic.

“With a record number of multi-family apartment units currently under construction, this vacancy rate will remain elevated in the near future,” according to the report.

Rents increased modestly in July in 71 of the nation’s 100 largest cities, but thanks to sluggish rent growth throughout the past 12 months, prices are down year-over-year in 67 of these 100 cities.