In December, U.S. median rents dropped (-0.4%) for the eighth month in a row and across all-sized homes
Santa Clara, CA – Jan. 25, 2024 (PRNewswire) The U.S. rental market experienced a noticeable shift in momentum in 2023 and closed out the year with eight straight months of year-over-year price declines, according to the Realtor.com® December Rental Report released today. While rents are overall up from pre-pandemic levels, an uptick in supply from a building boom in recent years means 2023 didn’t see a new peak in rent prices from their 2022 highs.
In December, the median asking rent for 0-2 bedroom properties in the 50 largest metros dipped to $1,713, down $7 (-0.4%) from the prior December and down $63 (-3.5%) from its July 2022 peak. Median rents declined across all unit sizes, and most notably in Western metros, but are still $309 (22.0%) higher than the same time in 2019.
“The rental market took a turn in 2023 as an influx of new multi-family apartments coming to the market exerted downward price pressure on median asking rents, which resulted in eight consecutive months of year-over-year price declines as we closed out the year,” said Danielle Hale, Chief Economist at Realtor.com®. “Amid high inflation and costs, softening rental prices throughout 2023 offered renters a small reprieve, and looking forward, Realtor.com® anticipates continued weakness in the rental market for 2024, as a much-needed supply of apartment units continues to come onto the market and further impacts market dynamics.”
December 2023 Rental Metrics by Unit Size – National
| Unit Size | Median Rent | Rent YoY | Rent Change – Dec 2019 |
| Overall | $1,713 | -0.4 % | 22.0 % |
| Studio | $1,437 | -1.0 % | 16.7 % |
| 1-bed | $1,593 | -0.7 % | 21.7 % |
| 2-bed | $1,896 | -0.4 % | 24.8 % |
Supply exceeds demand in West, South and pushed down prices, while Northeast, Midwest see the opposite
Regionally, rental trends in December mirrored patterns seen in October and November. In the West and South, supply exceeded demand, leading to a decrease in rents, while markets in the Northeast and Midwest experienced more rental demand compared to supply, resulting in sustained rent growth.
In December 2023, the median rent in the West was 1.6% lower than a year ago. Big metros such as San Francisco (-2.8%) and Los Angeles (-3.5%) continued to see year-over-year rent declines. While rental demand in the South remains vigorous, heightened supply from a substantial 32.0% growth in annual multifamily completion rates from January–October 2023 contributed to a downward push on rent prices, resulting in an overall decline in rental costs. The median asking-rent for 0-2 bedroom properties in the South was -0.5% lower than one year ago. Orlando, Fla. (-6.2%), Austin, Texas (-5.4%) and Dallas (-4.7%) saw the most significant year-over-year rent declines.
In contrast, rents in populous Northeastern metros such as New York (6.2%) and Boston (6.3%) continued to experience faster growth, likely the result of heightened demand from a robust labor market and slower growth in new multi-family home construction in the region. Midwest metros, bolstered by relative affordability, were up 2.0% from the same time last year. Specifically, Milwaukee (5.0%), Cleveland (4.7%), Indianapolis (2.8%) and St. Louis (2.8%) emerged as the top-performing markets in the Midwest with the fastest year-over-year price growth.
Rental Data – 50 Largest Metropolitan Areas – December 2023
Methodology
Rental data as of December for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
With the release of its July rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since July 2023 will not be directly comparable with previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today’s on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
Media contact: press@realtor.com
SOURCE Realtor.com
