US Median Asking Rents Decline for Third Consecutive Month in December

Redfin reported on Monday (1-8-24) that the median US asking rent fell 0.8% year-over-year to $1,964 in December. This marks the third consecutive month of declines and follows a 2.1% annual decline in November—the largest since 2020. Month-over-month, rents were just 0.2% lower.

On a regional basis, in December the median asking rent in the Midwest increased 3.7% year-over-year to $1,434. Rents also climbed in the Northeast, rising 1.7% to $2,439. On the hand, rents fell 1.0% year-over-year in the South to $1,632 and declined 0.6% year-over-year in the West to $2,346.

Redfin notes that there are more newly built and under-construction apartments in the US than there were in December 2022. The number of completed apartments is near the highest level in more than 30 years, and that number is just short of its all-time high. As a result, vacancy rates continue to increase as renters have a growing number of buildings to choose from. In 2023Q3, the most recent period from which data is available, the rental vacancy rate rose to 6.6%—the highest level since 2021Q1.

Commenting on the latest rental vacancy rate report, Redfin Economic Research Lead Chen Zhao said:

“High supply—more so than low demand—is driving rent declines. But if mortgage rates continue to drop at a fast clip in 2024, slowing rental demand could become a major driver of rent declines. That’s because more Americans would ditch the rental market to become homeowners, leaving landlords with even more vacancies.”