The rent is finally cooling down. Find out how prices change in your area.

The rent is finally cooling down.  Find out how prices change in your area.

There's good news for renters: Your rent is very high finally Don't rise anymore.

Monthly question Prices rose by 15 percent between 2020 and 2022, representing the fastest rise in rents in nearly a century. But now costs are calming down.

Change in average rent
June 2022 to June 2023

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Price estimates are for multifamily rentals in counties with at least 1,000 units.

Rent growth across the country has returned to pre-pandemic levels — growing by about 1 to 3 percent annually, according to real estate data firm CoStar Group. In some recent hot spots, including Austin and Atlanta, prices have already started to fall.

“The rental market is finally catching its breath,” said Igor Popov, chief economist at Apartment List. “This summer looks a lot different than the last two summers: we have reached a more stable period, and in some parts of the country, renters are back in the driving seat.”

Overall, year-over-year asking rents rose 1.1 percent through June 30, down from 2.8 percent in March, Costar data shows.

The biggest reason for this slowdown: more housing. Census data shows that nearly 1 million new housing units — an all-time high — are under construction across the country. Of those, 520,000 are expected to hit the market this year, with another 460,000 to follow in 2024, according to CoStar.

Meanwhile, rental appetite is declining as Americans settle into post-pandemic living and spending patterns. Demand for apartments fell in 2022, reaching the weakest level since 2009, according to a RealPage market analysis. Although rental activity has rebounded somewhat since then, it is still significantly lower than it used to be. Fewer people with roommates are branching out on their own. Young people stay in their parents' homes. And retirees who may have downsized from homeownership to rentals are waiting for the housing market to bounce back before moving.

The result is a growing mismatch between available apartments and potential renters, leading to lower price growth.

This is especially the case in the Sun Belt, where developers have been quick to capitalize on growing rental demand. The influx of new residents early in the pandemic — mostly white-collar workers leaving urban centers like New York and San Francisco in search of warmer weather and cheaper housing — led to a sudden boom in rents in many Southern cities. Annual rentals in Shares in Phoenix, Dallas and Miami rose as much as 16 percent between 2021 and 2022, Costar data shows.

But rent increases have now stalled – and are expected to fall further – as new options flood the market. In many Sun Belt areas, such as Las Vegas, Austin and Nashville, prices have fallen 1 to 3 percent in the past year, according to Costar.

“We've seen a housing boom in the Sun Belt, because of the big rebound those states had early in the pandemic,” said Jay Lebeck, national director of multifamily analytics at CoStar. “Developers have accelerated their plans to add units in those locations, and that's what's coming online now.”

The majority of these new rentals — 70% of them — are located in luxury properties, with amenities like rooftop pools, co-working spaces and spas, aimed at catering to recent transplants with big budgets, he said.

But as demand declines, these luxury apartments are also seeing the biggest drop in prices. High-end apartment rents fell by 0.2 percent last year, while mid-range and lower-end property prices rose by up to 3 percent in the same period.

“We're finally getting the supply that was built in response to the pandemic demand surge,” said Darryl Fairweather, Redfin's chief economist. “That inventory is finally here — and for high-income renters, it means there's a whole new set of options.”

However, rents are much higher than they were in 2019 and are unlikely to return to pre-pandemic levels, even in the most volatile markets, according to experts.

In the Atlanta area, for example, rents rose 23 percent between 2019 and 2022. And although monthly costs have begun to decline recently — by 2 percent, so far this year, to an average of $1,648 — renters pay about $330 more per month than renters. They were before the pandemic.

Overall demand in the Atlanta area is steadily declining: More people moved out of apartments than more people moved into them in the first half of 2023, according to broker Oleg Konstantinovsky. Meanwhile, the market has added 7,000 new housing units so far this year, he said, with another 50,000 units under construction.

Many new buildings offer perks, such as free rent for a month or two, he said. This puts pressure on existing apartment complexes to maintain stable rents, and leads to lower overall price growth.

“The incentives are definitely coming back. People are getting a little bit of cost savings,” he said. But, he added, “Atlanta is definitely not as affordable as it used to be.”

About this story

The analysis is based on average monthly rent data provided by CoStar Group. The data includes newly posted rents, not lease renewals, for 1,660 counties for June of each year from 2019-2023.

Counties with fewer than 1,000 multiple units were excluded, according to Census Bureau data. Peru County, Illinois; Evangeline Parish, Louisiana, and Morgan County, Colorado, were excluded because they were notable outliers with annual rent changes of more than 100 percent.

Data for new multiple units under construction are from the Census Bureau.

The Sun Belt includes Alabama, Arizona, Arkansas, Georgia, Louisiana, Mississippi, Nevada, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas.

Kevin Scholl contributed to this report.

Editing by Kate Rabinowitz, Jane Liberto, and Carly Domb-Sadoff.

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