U.S. Median Asking Rent Decline for the First Time Since 2019

Realtor.com reported in the release of their May 2023 Rent Report, that the U.S. rental markets suffered its first year-over-year decline since 2019, when Realtor.com began tracking rent movement. According to the report, rents were down 0.5% for studio through 2-bedroom properties across the top 50 U.S. metro areas. In May the median asking rent was $1,739, down $38 from July 2022’s peak but still up by $3 from April and $344, or 24.7% higher than the same time in 2019 (pre-pandemic).

Obviously good news for renters, who have been facing financial headwinds for the past several years. It has reopened, at least for some, the opportunity to seek out a newer\different apartment location, perhaps with additional amenities but at or below their current rent.  On the other hand, declining rents is not good news for landlords as it potentially will impact profit margins, especially when considering the still-high inflation rates, which is keeping their costs at elevated levels.

With the release of the 2023 mid-year forecast, Realtor.com predicts that rental prices will drop another 0.9% in 2023. In the second half of 2023, Realtor.com expects that demand for rental properties will remain strong given elevated housing prices and mortgage rates. However, with the cost of moving and the associated costs that come with a move, many apartment dwellers are choosing to stay in their current location to save money. As a result, the lower mobility among renters is expected to dampen the level of competition within the rental market.