Multifamily Asking Rents Reach Highest Level Since May 2022

According to Redfin, the median asking apartment rent in May was up 0.8% year-over-year to $1,653, following the 0.9% growth in April after 11 consecutive monthly decreases. This is the highest asking rent level since May 2022.

“Demand from young renters remains high, as many of them are opting to stay put rather than contend with an increasingly unaffordable homebuying market,” Redfin Senior Economist Sheharyar Bokhari said in prepared remarks. “But so far, rent price growth has been limited because there are enough new apartments to meet demand, even in the busiest time of year for the rental market.”

As one might expect, the changes in asking rents depend on geography. The biggest jump among 33 metros that Redfin analyzed was in Washington, D.C., where the median asking rent was up 11.1% year over year in May. Cincinnati (10.9%), Chicago (10.8%), Virginia Beach, VA (10.3%), and Minneapolis (10.3%) also saw double-digit gains.

As for the biggest declines, they were in Jacksonville, FL (-10.1%), San Diego (-8.7%), Austin, TX (-7.2%), Seattle (-5.9%) and Phoenix (-5.5%).

As far as a larger area, the Sun Belt saw falling asking rents because of the amount of additional inventory that’s been built between 2023 and expected to arrive in 2024. “But the pandemic housing boom is now in the rearview mirror, and property owners are facing vacancies, which is causing rents to cool,” Redfin wrote.

An asking rent isn’t necessarily what landlords will get because they don’t include the effects of concessions. “The growing divergence between asking and effective rents indicates that landlords, confronted with rising vacancies, are offering larger concessions to attract tenants,” Moody’s wrote in February 2024. However, the growth does show increased confidence in trying to attain higher payments.

Even if effective rents are lower than asking rents, overall rent declines have been decelerating, according to the National Association of Realtors.

Rents are likely to continue slowing through the rest of the year, but the NAR says the deceleration “bottomed out” in February 2024 and have slowed since. “This deceleration trend could hinder further improvements in the overall rate of inflation and add long-term uncertainties, underscoring the consistent need for additional housing construction to alleviate the supply shortage that is contributing to higher costs,” they wrote.

Rents have been falling, but not by that much from one measure. According to NAR’s calculations, even after 10 months of decline, U.S. median rent is only 1.4%, or $24, below the August 2022 peak. It was still $306 (21.5%) higher than the same time in pre-pandemic 2019.