Rents are finally falling for the first time in years and after record hikes last summer. In fact, rents will continue to drop through the rest of the year.
US Median Rent Falls
- The US median rent in May fell from May 2022, the first annual rent decline in at least three years
- In May, the national median asking rent was $1,739, which was up ($3) from April but down 0.5% from May 2022.
- July 2022’s peak was $1,777, but rents remain nearly 25% higher than in 2019.
- Predicts that rents will continue to drop, averaging -0.9% from 2022.
- Rental-driven inflation is likely behind us,
- Those who have not moved in several years will see an increase in rent if they move, despite market improvements in pricing.
- The West and the South recorded year-over-year rent declines in May of 3% and 0.7%
- Midwest and Northeast are still seeing rents climb higher
- The metro areas with the largest year-over-year rent jumps include Columbus, Ohio (9.3%); St. Louis, Missouri (7.7%); and Cincinnati, Ohio (7.7%). The largest year-over-year declines are in Las Vegas (-6%); the Riverside and San Bernardino area in California (-5.9%); and Phoenix, Arizona (-5.7%).
- Rents are expected to continue to drop through the remainder of this year
- Historic levels of multifamily construction currently underway, further driving down costs.
Professional Quote
Michael Orefice, SVP of Operations at SmartFinancial, says:
“While homeowners insurance rates are going up, renters insurance remains steady. Renters insurance rates have also been declining since 2014 and significantly so since 2017, when the average rate was around $180. By 2020, rates had fallen to an average of $173 a month and have remained low ever since.
Unlike homeowners insurance, renters insurance rates are not tied to the value of the rental property, but there are other factors that influence rates, like crime rates in the area, insurance rates in the state, the size of the home and whether or not the home or apartment unit is safe from intruders and has indoor sprinklers in case of a fire.”
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