Asking Rents for Newly Constructed US Apartments Declined as Availability Rose in Q2

On Thursday, Redfin reported that its analysis of the US Census Bureau’s data for newly constructed, unfurnished, unsubsidized, privately financed rental apartments in buildings with five or more units reveals that asking rents for newly constructed apartments fell to $1,746 in Q2, down 6.2% from a year earlier and the lowest level in more than two years.

Redfin notes that it was also the second consecutive quarter that rents for newly built apartments posted an annual decline and the second-steepest drop in the past five years—trailing only Q1, when rents fell 7.5%.

Monthly asking rents for new apartments hit a peak of $1,889 in 2022Q1 but have trailed off since, as the number of newly constructed apartments shot up. Apartment completions rose 18.7% year-over-year in Q1 to reach the highest number in over a decade.

Commenting on the report, Redfin Senior Economist Sheharyar Bokhari said:

“Rents for new apartments will likely fall a little more this year, because there are still a ton of new buildings being completed. With new apartments popping up everywhere, owners are competing with one another to find tenants by reducing rents and offering concessions like free parking. If you’re a renter in a market like Dallas or Nashville, where construction has been booming, there are likely deals to be found.”