Here’s some positive news for renters, though it may not be as encouraging for landlords: rental prices in the United States have continued to decline, marking the 15th consecutive month of year-over-year decreases. In October 2024, the median asking rent fell by $14, or 0.8%, bringing the average rent down to $1,720.
This reduction provides significant relief to renters, but landlords are facing challenges as regular rent increases that typically offset inflation costs are disappearing. Despite the decline, rents remain substantially higher than pre-pandemic levels, specifically $272 more than in October 2019.
Factors contributing to this trend include inflationary pressures, with real estate inflation rising by 18.8% over the last five years. However, a notable increase in housing supply, particularly in multifamily units, is driving down rents. Between January and September 2024, approximately 606,000 new multifamily housing completions were recorded, especially in the South, which saw a 49.1% increase compared to 2023.
Major cities like Miami, Austin, TX, and Memphis, TN are experiencing rent decreases of 1.3%, 4.2%, and 5.4%, respectively. While this influx of new housing stock makes these markets more accessible for renters, landlords are grappling with rising operational costs and increased vacancy rates. Approximately 40% of landlords plan to sell one or more properties within the next year due to these challenges.
Looking ahead, rental housing stock is projected to grow by 1.1%, exceeding 49 million units by fall 2025, with the South expected to see the largest increase at 1.5%. A balanced approach that considers both tenant affordability and landlord sustainability is essential for fostering a healthy rental market moving forward.
FULL ARTICLE: Renters and Landlords in Today’s Rental Market