US Monthly Median Asking Rents Decline Year-Over-Year in May

Redfin reported on Friday (6-9-23) that US median asking rents fell 0.6% year-over-year to $1,995 in May, the largest annual decline since March 2020. That compares to a near-record increase of 16.5% a year ago.

In the West, asking rents declined 2.1% year-over-year—nearly four times the national pace. However, other regions experienced rent increases. In the Northeast, asking rents climbed 5.4% higher, followed by the Midwest at 4.9% and the South with only a 0.8% increase.

Redfin notes that rents have cooled in part because the number of rentals on the market has grown, giving landlords less flexibility to hike prices because they’re dealing with an increase in vacancies as renters get more options to choose from. This is the result of America building more multifamily housing. Completed residential projects in buildings with five or more units rose 24.2% year-over-year on as seasonally adjusted basis to 400,000 in April (the most recent month for which data is available).

Another reason Redfin suggests the rental supply has been growing is that many homeowners are opting to rent their homes out instead of selling them. Some have already moved into their next home and are renting their previous home out to cash in on still-high rents, while continuing to build equity on a house with a relatively low mortgage payment.