For the first time since 2020, landlords are asking for lower rents than they were a year ago. According to a recent Realtor.com® report, prices nationwide fell 0.5 percent year-over-year in May to a median of $1,739 per month in the 50 largest metro areas. Rents are down $38 from last July's price peak.

"The biggest takeaway is that this is a big relief for renters who have faced financial hardship for years," said Realtor.com economist Jiayi Xu." It opens the door for renters who want to move to a new location to explore job opportunities, but have been reluctant to do so due to the high cost of relocation."

Realtor.com expects rents to drop 0.9 percent this year compared to 2022. While that's not a huge breakthrough, it's a far cry from the COVID-19 pandemic when rents soared to new heights. Many tenants are stuck because they can't afford to buy a home as prices for sale are also soaring.

Competition for apartments is not expected to be as fierce in the future as more tenants are likely to stay put to avoid costly moves. With more rental units coming online this year and next, renters should have more options, forcing landlords to lower prices or offer incentives to attract tenants.

"Rents will continue to fall, but not quickly," Xu said. Prices "are still high, so affordability remains a big challenge."

(Realtor.com surveyed rents for studios, one- and two-bedroom apartments, condominiums, rowhouses and single-family homes in the 50 largest metros. (Metropolitan areas include major cities and surrounding towns, suburbs and smaller urban areas).

Rents may be declining nationwide, but in some areas of the country, tenants may still be subject to unwelcome increases.

Landlords are still jacking up rents in cheaper parts of the country, such as the Midwest and Northeast. Meanwhile, rents are falling in the pricier West and South, where rents had risen sharply during the pandemic.

Columbus, Ohio, saw the largest price increases, with rents there rising 9.3 percent year-over-year in May. Ohio's capital was followed by St. Louis, 7.7 percent; Cincinnati, 7.5 percent; Indianapolis, 7.3 percent; and Louisville, Kentucky, 7.2 percent.

"These are still areas that are affordable," Xu said." People are considering moving to these areas for affordable housing. This increased demand is driving up prices."

Meanwhile, Las Vegas saw the largest drop in rents, down 6 percent year-over-year. Riverside, California, was next at -5.9 percent; Phoenix, at -5.7 percent; Austin, Texas, at -5.6 percent; and Tampa and San Francisco, Florida, at -4 percent.

Now that people are back in the office and not staying home all day, space is not as much of a premium.

Rents for two-bedroom units are down, but rents for smaller studios and one-bedroom units are up.

Prices for studios increased 2% year-over-year to a median of $1,463 in May. Prices for one-bedroom units rose 0.4 percent to $1,628, while prices for two-bedroom units were 0.5 percent cheaper than a year ago, at $1,923. Larger units have experienced the largest price increases over the past four years, rising 26.7 percent over that period, as more tenants compete for additional square footage.

Smaller units are "much cheaper compared to larger units," Xu said." Affordability is driving demand, which is driving prices up."