US asking rents after first annual decline in three years

US asking rents after first annual decline in three years

The average asking rent fell 0.4% in March to its lowest level in 13 months. Austin and Chicago saw the largest declines, while Raleigh and Cleveland saw the largest gains.

The median asking rent in the United States fell 0.4% year over year to $1,937 in March. This is the first annual decline since March 2020 — when the coronavirus was declared a pandemic — and the lowest average asking rent in 13 months. In comparison, rents were higher 17.5% one year ago, in March 2022.

The average rent request in March was unchanged from February. They remained $322 (19.9%) higher than at the start of the pandemic three years ago, although wages more At about the same pace during this time.

“Rents are going down, but they seem to be back to normal, which is fairly healthy,” he said. And close, a Redfin real estate agent in Chicago, where the average rental request in March was 9.2% lower than it was a year earlier. “It's similar to the cost of eggs. You could say the prices of eggs are drop, but what's really happening is that they're finally going back to the $3 standard instead of $5 or $6. “Rents have ballooned during the pandemic, and now they are coming back down to earth.”

Rents have risen over the past two years due to increasing incomes and families formation It has risen as more millennials are starting families. But the family formation is now slowing downThis is partly because many people are choosing to stay put rather than move during a period of economic uncertainty.

Rents fall due to oversupply, inflation and economic uncertainty

Rents fell from a year earlier in March, largely due to excess supply resulting from the pandemic homebuilding boom.

The number of multifamily units under construction and the number of completed units rose to the second highest level in more than three decades in February, the most recent month for which data is available. Residential completions in buildings with five or more units jumped 72% year over year on a seasonally adjusted basis. 509,000This is the highest level since 1987, excluding February 2019. Project starts in buildings with five or more units rose 14.3% to 608,000This is the highest level since 1986 except for April 2022.

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The short-term rental market is in a similar situation. Airbnb's marketplace is Saturated With the supply, the authorities impose more stringently Restrictions on hosts in some areas, prompting some landlords to lower rents or sell, according to Redfin agents.

The overall rental market is also slowing due to rising rental costs, inflation, high unemployment rates, and recession fears Rental demand to ease. Vacancies for rent on It risesThis has prompted some landlords to reduce rents and/or offer perks such as discounted parking.

Rents fell in 13 major metro areas

  1. Austin, Texas (-11%)
  2. Chicago, IL (-9.2%)
  3. New Orleans, LA (-3%)
  4. Birmingham, AL (-2.9%)
  5. Cincinnati, Ohio (-2.9%)
  6. Sacramento, California (-2.8%)
  7. Las Vegas, Nevada (-2.4%)
  8. Atlanta, GA (-2.3%)
  9. Phoenix, Arizona (-2.1%)
  10. Baltimore, Maryland (-2%)
  11. Minneapolis, MN (-1.6%)
  12. Houston, Texas (-1.5%)
  13. San Antonio, Texas (-1.3%)

“A lot of people in Chicago became landlords during the pandemic,” Close said. “Some were looking to take advantage of rising rents. Some rented out their homes because selling meant giving up a very low mortgage rate. Others tried to sell but did not get a satisfactory offer due to slowing demand for homebuyers. Now we have too much supply of rentals, Which leads to lower prices because renters have more choices.

Raleigh and Cleveland saw the largest rent increases

  1. Raleigh, North Carolina (16.6%)
  2. Cleveland, Ohio (15.3%)
  3. Charlotte, Nick (13%)
  4. Indianapolis, IN (10.5%)
  5. Nashville, Tennessee (9.6%)
  6. Columbus, Ohio (9.4%)
  7. Kansas City, MO (8.1%)
  8. Riverside, California (7.2%)
  9. Denver, CO (7%)
  10. St. Louis, MO (4.2%)

Three factors have driven up rents in Nashville, according to local real estate agent Redfin Jennifer Powers: Investors and housing prices rise strong Local labor market.

“A large number of investors bought homes in Nashville and converted them into rentals during the recession pandemic In order to take advantage of low mortgage rates and high demand for rents, which allowed them to raise rents. While investors have since pumped in Brakes “On purchases, they haven’t lowered rents,” Powers said. “Demand for rentals has risen in part because a surge in housing prices has put homeownership out of reach for many families. High mortgage rates over the past year and a half have also priced out buyers.

The average rate for a 30-year fixed mortgage is now 6.27%down from a peak of 7.08% but up from 5% in April 2022, causing the typical homebuyer's monthly payment to rise by about $300 A year ago. While house prices started… drop On an annual basis, they remain more than 30% higher than when the pandemic began.

Average asking rents: March 2023

United States metro area Average asking rent Year-over-year change in average rental demand
Atlanta, GA $2055 -2.3%
Austin, Texas $2,104 -11.0%
Baltimore, Maryland $1,983 -2.0%
Birmingham, AL $1,590 -2.9%
Boston, MA $3839 3.3%
Buffalo, New York $1,637 1.3%
Charlotte, Nick $1,969 13.0%
Chicago, IL $2,206 -9.2%
Cincinnati, Ohio $1,564 -2.9%
Cleveland, Ohio $1,530 15.3%
Columbus, Ohio $1,618 9.4%
Dallas, Texas $2,133 1.0%
Denver, CO $2797 7.0%
Detroit, Michigan $1,643 2.0%
Hartford, CT $2,031 2.0%
Houston, Texas $1,723 -1.5%
Indianapolis, IN $1,539 10.5%
Jacksonville, Florida $1,633 1.7%
Kansas City, MO $1,558 8.1%
Las Vegas, Nevada $1,759 -2.4%
Los Angeles, California $3,412 1.4%
Louisville/Jefferson County, Kentucky $1,378 0.3%
Memphis, Tennessee $1,618 2.7%
Miami, FL $3,074 0.7%
Milwaukee, Wisconsin $1,724 4.1%
Minneapolis, MN $1,758 -1.6%
Nashville, Tennessee $2,160 9.6%
New Orleans, LA $1,792 -3.0%
New York, New York $4,022 2.9%
Orlando, Florida $2,128 2.0%
Philadelphia, Pennsylvania $2,333 1.3%
Phoenix, Arizona $2,088 -2.1%
Pittsburgh, Pennsylvania $1,873 2.1%
Portland, OR $2479 0.3%
Providence, RI $2,361 3.5%
Raleigh, North Carolina $2080 16.6%
Richmond, Virginia $1,749 0.5%
Riverside, California $2801 7.2%
Sacramento, California $2,625 -2.8%
Salt Lake City, Utah $1,891 2.1%
San Antonio, Texas $1,435 -1.3%
San Diego, California $3,410 2.0%
San Francisco, California $3,716 2.6%
San Jose, California $3609 3.2%
Seattle, Washington $2,861 0.7%
St. Louis, MO $1,552 4.2%
Tampa, Florida $2,222 3.9%
Virginia Beach, Virginia $1,703 0.5%
Washington, DC $2,628 1.1%

methodology

Redfin's national rent figure represents a weighted average of average rents in the 50 most populous U.S. cities, weighted by the number of rental listings. We analyzed the rental prices of rent. For the metro-level section of this report, we analyzed rents in the 50 most populous U.S. metro areas. The Oklahoma City, OK metro is excluded from the Metro section as we investigate the data to ensure accuracy.

Prices reflect the current costs of new leases during each time period. In other words, the amount shown as the average rent is not the average of what all renters pay, but the average asking price for apartments that were available to new renters during the reporting month.

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