In June, rents in the nation's 50 largest housing markets fell 1 percent year-over-year to a median monthly rent of $1,745, according to a new report from Realtor.com®. It was the second consecutive month of declining rents.
But before renters kick back, rents were only down $31 from their peak last July. Compared to June 2019, before people had even heard of COVID-19, their monthly bills were about 24 percent, or $339, higher.
"Falling rent prices continue to bring relief to renters, which is encouraging for renters' budgets," said Realtor.com economist Jiayi Xu." Despite the drop in rents, affordability remains the biggest challenge. Rents are still very, very high."
Realtor.com surveyed rents for studios, one- and two-bedroom apartments, condominiums, townhouses and single-family homes in the 50 largest cities. (Large cities include the main city and surrounding towns, suburbs and smaller urban areas).
The good news for renters who are barely scraping by is that there are a record number of apartments under construction - about 1 million. Once these apartments are up and running, landlords may be forced to lower prices to attract tenants.
"Rents will continue to fall, but minimally," Xu said." When we see an increase in the supply of rental housing, we expect rental prices to loosen slightly."
Ironically, renters are paying more for smaller spaces to save money. Demand for studio apartments, which are typically the least expensive apartments, remains strong as renters look for ways to cut back on expenses. in June, prices for studio apartments rose 1 percent to about $1,445 per month.
Rents for one-bedroom apartments declined slightly by 0.7 percent, and rents for two-bedroom apartments fell by 1 percent. Nationally, rents in June were approximately $1,630 per month for one-bedroom apartments and $1,945 per month for two-bedroom apartments.
Geographically, rents continued to rise in the Midwest, the nation's least expensive region. in June, rents in the region rose 3.2 percent year-over-year. However, in the nation's most expensive regions, such as the West, rents fell 3.8 percent, and some of the cities where rents rose the most during the pandemic, such as Austin, Texas, also saw declines.
Rental prices in Austin fell sharply, by 8.6 percent, to a median monthly rent of $1,868. The tech hub and capital of Texas has seen skyrocketing home prices over the past few years as a large number of new residents and businesses have moved into the city.
It was followed closely by Las Vegas (-6.6%), Phoenix (-6.1%), Dallas (-5.7%), Riverside, CA (-5.6%), San Francisco (-4.9%), Tampa, FL (-4.7%), Orlando, FL (-4.6%), Atlanta, GA (-4.3%) and Sacramento, CA (- 4.1 percent).
Half of the cities with the largest home price gains were in the Midwest and four were in the South.
Milwaukee had the largest price increase, at 7 percent. 3.3 percent).
"The Midwest has greater affordability and a strong labor market, resulting in greater demand," Xu said.
