Florida, Texas Buck National Trend of Rising Apartment Rents

While median apartment asking rents are rising across the country, Florida is bucking the national trend.

According to a new report from Redfin, apartment asking rent rose 0.7% year over year nationwide to $1,654, the biggest gain in more than a year and the highest median price since October 2022. However, rent prices declined in the four most populous metro areas in Florida. Jacksonville experienced the biggest year-over-year drop in median asking rent in at least 5 years at 12.4% in June. Tampa Bay posted a record 6% decline, and in Orlando and Miami, rent prices fell 4.8% and 3.8%, respectively.

Rents also are falling in Austin, Texas, with a record decrease of 12.6% year over year.

Redfin attributes these declines to an oversupply of apartments built during the pandemic to meet surging demand. Rents are coming down as property owners now compete for tenants. In addition, many renters were priced out of the market when rents surged in 2022 by as much as 37.8%, Redfin said.

“It’s a good time to hunt for bargains if you’re a renter in Florida or Austin,” said Redfin senior economist Sheharyar Bokhari. “With so much supply on the market, renters may be able to get concessions like free parking or discounted rent. But renters in Florida should be aware that landlords are grappling with surging home insurance costs, and they may ultimately ask tenants to foot the bill via higher rents.”

Elsewhere, demand is pushing rents higher particularly as young renters opt to continue renting rather than deal with the challenging home-buying market. Rent prices are rising in many Midwest and Northeast metros where new construction has been slower than in the Sun Belt. The Midwest is also the most affordable region to live in, which helps bolster demand at a time when housing affordability is strained across most of the U.S.

In Virginia Beach, Virginia, the median apartment asking rent rose 12.9% year over year in June, the biggest jump among the 33 metros Redfin analyzed. Cincinnati followed with the median asking rent increasing by 12.2%, Washington, D.C., at 11.9%, Chicago at 11.3% and Baltimore at 10.7%.

New construction is tempering upward rent pressure somewhat as landlords work to fill vacancies. Completions are still near a record high as projects started during the pandemic are now being completed, but the market is experiencing a shift as multifamily building starts have now fallen below their 10-year historical average.

Apartment vacancy stands at 7.8%, up slightly from 7.4% at the beginning of last year and 7% at the start of 2022.