Apartment Rents Post National Monthly Growth of Over 1% in May

The national rent index saw both one and two-bedrooms increase 1.2% this May to medians of $1,504 and $1,865, respectively, marking the first time there has been monthly growth rates of over 1% in 20 months, according to Zumper.

Syracuse and Columbus rents were the fastest growing nationwide, both climbing over 20% since this time last year, while demand has shrunk in some of the biggest California cities as the majority of this state’s markets experienced declining annual rent rates.

On an annual basis, the national one-bedroom rate was flat while two-bedrooms inched up 0.5%. Although the annual rates have cooled significantly from the price hikes experienced in the last few years, they have not offset those large increases. As a result, the national one-bedroom rent is still $287 more expensive than it was 4 years ago and the national two-bedroom rent is nearly $400 pricier.

Seven of the 11 California cities in the report had negative annual rent rates for one-bedroom units and of those 7 declining markets, nearly all are located in the top 20th percentile in terms of price and population. Oakland and Sacramento led the pack with rents down between 8% – 9% since this time last year. Los Angeles, San Jose, San Francisco, San Diego, and Long Beach followed suit.

Declining demand – as opposed to increased supply – seems to be the main reason why rents are diving in California, Zumper concludes. Of the top 50 largest markets, the Bay Area and the Los Angeles metro area have seen some of the largest population losses in the last few years. Also these two areas have not recovered from COVID-related job losses Meanwhile, San Diego experienced net move-outs in nearly every submarket and experienced the worst demand performance of the nation’s 150 largest cities, while Sacramento’s occupancy rate has continued to decline every quarter between 2021 through 2023.

On the other end of the spectrum, Syracuse and Columbus had the fastest growing rents nationwide, both climbing over 20% annually.

Syracuse saw one-bedroom rent jump 28.6%, while Columbus rent climbed 22.5%. Notably, Syracuse rent also had the biggest monthly growth rate nationwide as well, Zumper pointed out. Syracuse has recently seen historic population growth, it houses a large national university, and many homes are owned, rather than for rentals, so the demand and competition in this city have swelled considerably, it said. Meanwhile, Columbus has been rapidly developing, drawing many people in for a more affordable cost of living and employment opportunities – the city actually saw the largest population growth among major US metropolitan areas at the end of 2023. With the rising demand in both Syracuse and Columbus, rent rates will likely continue to increase throughout the year in both cities until new apartment supply is built, Zumper said.