The median asking rent in August was $2,052, just $2 below the all-time high set last year. According to the latest information, instead of lowering rents, some landlords prefer to make temporary concessions to attract tenants when vacancies increase. report from red fin.
“A year ago, we didn’t see any concessions in the market at all. Fast forward to today, and things like that are much more common, with landlords making one to three offers to attract new tenants without lowering their asking rents. We are offering a free month,” he said. rent. John Zigler CEO.
Meanwhile, some building owners raise rents for existing tenants, but not new ones, in order to increase revenue without scaring off future renters.
In other words, rents are falling in real terms in some areas, even if the decline is not reflected in asking rent data.
Additionally, the company announced that annual rent growth for single-family homes slowed for the 14th consecutive month in June. core logic. The report said rent growth has slowed over the past year due to slower household formation, economic uncertainty, affordability challenges and increased rental supply. However, rents are still hovering around record highs.
The national vacancy rate for the second quarter of 2023 was 6.3%, up from 5.6% in the same period last year. The same rate for the first quarter of 2023 was 6.4%, the highest level in two years. In this situation, landlords have to fill more vacancies and have less room to increase prices. At the same time, completed residential projects in buildings with five or more units rose 28.9% year-over-year in the second quarter, the most recent period for which data is available.
Rent prices fall in the West, rise in the Midwest and Northeast
In the West, the median asking rent in August fell 1.1% annually to $2,469. Prices in the South also fell 0.3% to $1,673, the first decline since 2020.
Rental markets in the West and South cooled quickly after the frenzy of the pandemic, when people flooded into Sunbelt cities like Phoenix, Miami and Dallas. As a result, there is more room for rents to fall in these areas.
Redfin economists also noted that Western countries have been disproportionately affected by layoffs in the tech sector. In contrast, asking rents in the Midwest rose 4.6% year-over-year to a record high of $1,434, and in the Northeast, they rose 1.2% to $2,509.
