Rental Market Returns to Normalcy After Soft Winter

Rental rates nationwide are beginning to accelerate, with asking rent on a one-bedroom unit increasing 1.5% this month to $1,526 and rent for a two-bedroom unit increasing 1.9% to $1,900.

“We may have finally returned to the first normal renting season since 2019,” said Anthemos Georgiades, CEO of Zumper, which tracks rents nationwide in its National Rent Report. “Following a soft winter, last month our national index recorded the highest monthly gains since the Fall of 2022 and rent growth has begun to accelerate into summer.”

On the heels of a large influx of rental supply – 66,000 new units delivered at the end of the first quarter – several Florida cities saw a decrease in rents after two years leading the nation in price hikes. Orlando, Jacksonville, Tampa and Miami experienced the largest added supply and all four had negative rent growth, according to the index. Rents in Jacksonville were down the most at 5.4% followed by Orlando at 3.1%, Miami at 2.1% and Tampa at 1.8%.

Zumper said the declines could have been much steeper given the large amount of new supply in Florida, which demonstrates how massive the state’s housing demand is. Other states with large amounts of new supply have experienced much bigger slowdowns, including Raleigh, North Carolina, which saw rents tumble more than 9% annually.

In Florida markets that did not have as large of a supply increase, including Tallahassee, St. Petersburg and Fort Lauderdale, rents increased a few percentage points from last year. Tallahassee, which ranks as the most affordable Florida city in Zumper’s index, attracts many renters who are priced out of other markets, putting upward pressure on rents.

Meanwhile, New York continues to lead rental rate growth with Syracuse, Rochester, Buffalo and New York City all logging double-digit rate increases. Rents in Syracuse remained the fastest growing, rising 29%, while Buffalo, Rochester, and New York City saw rents climb over 10%, according to Zumper.

New York City’s vacancy rate has reached a historic low of 1.4%. Zumper said this is likely thanks to strong employment in the market fueling demand for housing while supply has not grown enough, which has created an incredibly tight rental market.

Although the national rates are currently fairly low, they have not offset the large rent spikes experienced in the past few years as national rents remain $300 to $400 more expensive than 4 years ago, Zumper noted. The trend of monthly growth coupled with the current persistent inflation suggests that housing could remain a challenge for the Federal Reserve’s efforts to lower interest rates this year, the firm said.