Asking Rents Dive in These Markets

Median asking rent for the U.S. as a whole rose 1.7% between March and April and 1.1% year over year. But that pattern is far from the one followed in individual metros, where some saw median asking rents dive on both a monthly and annual basis and others suffered annual declines but slight rises during the month.

A new analysis by Redfin of median asking rents in newly listed apartment buildings with five or more units reveals significant variation among the 33 metro areas studied. The biggest year over year rent decline was experienced in Seattle, where it plunged 7.3%, though it rose 1.7% between March and April to reach $2,072.

Nine Sunbelt cities also underwent significant annual rent declines. The annual drop was 6.6% in Austin, where monthly rent also dipped 4.9%. In Nashville, annual asking rent fell 5.9% (monthly up 1.4%), in Jacksonville 5.6% (monthly down 0.7%), in Miami 5% (monthly up 2.1%), in San Diego 4.7% (monthly down 2.6%), in Phoenix 4.6% (monthly up 1.8%), in Charlotte 4.5% (monthly up 1.5%), in Tampa 4.3% (monthly down 1.9%), and in Orlando 3.3% (monthly up 0.1%).

“It’s worth noting that four of the 10 metros with the steepest April rent declines are in Florida,” the report stated. “A separate Redfin report covering the homebuying market found that on the west coast of Florida—which is facing a housing insurance crisis due to intensifying natural disasters—home prices are stagnating as housing supply surges.”

The report attributed the dive in Sunbelt rents to overbuilding of new apartments but said the uptick in new supply improved affordability for renters, “which can be a lesson for other American cities grappling with housing affordability challenges.” Furthermore, rents in some of these markets had skyrocketed to unsustainable levels during the pandemic, according to Redfin senior economist Sheharyar Bokhari.

On a national basis, the report found, the median asking rent rose 1.1% year over year to $1,648 in April—the first gain in a year. Asking rents climbed 1.7% from a month earlier. It attributed the U.S. hikes to rent increases especially in the Midwest, which has seen less new construction and is more affordable, and in the Northeast.

Minneapolis led the nation, seeing an annual rent increase of 10.3% (monthly up 0.6%). The annual increase was 9.9% in Cincinnati (monthly up 4.2%), in Chicago 9.1% (monthly up 3.6%), in New York 8.9% (monthly up 0.3%), in Washington, DC 8.6% (monthly up 5.1%), in Indianapolis 8% (monthly up 4.2%), in Virginia Beach 7.7% (monthly up 5.1%), in Houston 6.7% (monthly up 0.2%), in Boston 5.7% (monthly up 7%), and in Detroit 4.9% (monthly up 5.7%).

Houston’s good result broke the mold for two other Texas metros, Austin and Dallas, both of which suffered both annual and monthly rent dips.

In spite of the wide variation in outcomes, rents are now out of their wild and crazy phase though they remain high. “The median asking rent in April was just $52 below (-3.1%) the record high of $1,700 in August 2022,” the report noted. “While rents ticked up in April, they’re stable relative to the rollercoaster ride of the past few years; U.S. asking rents rose as much as 17.6% year over year during the pandemic, and then fell as much as 4.1% this past summer.”