US Median Asking Rents Increase for Third Consecutive Month in March

On Wednesday, Redfin reported that the median US asking rent rose 0.8% year-over-year to $1,987 in March, marking the third consecutive monthly increase follow three consecutive months of declines. Asking rents in March were little changed from February, up only 0.3%.

Rising rents in both the Midwest and Northeast helped drive the national uptick, but elevated mortgage rates also likely contributed, Redfin said. The average 30-year fixed-rate mortgage is 6.82%, below the 23-year high of almost 8% hit in October but still more than double the all-time low of 2.65% hit during the pandemic. Many people are delaying home purchasing plans because monthly payments for homebuyers are near their record high. That’s bolstering rental demand, and as a result, rent prices.

Housing costs are so high that many Americans can’t afford to buy homes, but rents are also elevated, putting a lot of people searching for housing between a rock and a hard place, Redfin said. The median asking rent in March was just 3.3% ($67) below the record high of $2,054 hit in August 2022.

There is some good news for renters: Prices aren’t growing nearly as fast as they were during the pandemic and are far more predictable. Redfin data shows that rents soared by as much as 17.7% year-over-year in 2022 due to the pandemic moving frenzy and then quickly cooled in 2023, falling by as much as 2.1% as an influx of apartment supply drove up vacancies. Year-over-year, rent growth has stayed below 3% since the start of 2023.

The number of apartments under construction remains near a record high, meaning there’s still a lot of supply in the pipeline, which will likely prevent rents from increasing dramatically in the near future, Redfin reported.