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The median asking rent in the U.S. fell to its lowest point in 13 months in March as the ongoing real estate slowdown continues hitting the rental market, according to a new report.
Median rent was down 0.4 percent in March compared to a year before when rent growth was near its peak. It now stands at $1,937 a month, according to Redfin, down from a peak of $2,053.
It was only the latest report to confirm an ongoing slowdown in rent, as Redfin said it was the first annual decline since the start of the coronavirus pandemic. Despite the slowdown, rent remains well above pre-pandemic levels.
“Rents are falling, but it feels more like they’re just returning to normal, which is healthy to some degree,” said Dan Close, a Redfin real estate agent in Chicago. “Rents ballooned during the pandemic, and are now returning to earth.”
Redfin used rental data from the company Rent., analyzing more than 20,000 apartment buildings in the 49 largest U.S. metros. The analysis captures new leases for apartments available in March, rather than all leases.
The price of rent skyrocketed during the early months of COVID-19 when people sought more space and formed new households. Demand has since softened as renters — along with everyone else — wait to see whether the U.S. will enter an economic downturn in the coming months.
That drop in demand paired with new supply after a period of record apartment construction is expected to lead to further rent drops, according to recent reports, including from Redfin. Vacancy rates are rising, which will keep downward pressure on the cost of rent.
“The number of multifamily units that went under construction and the number completed each rose to the second-highest level in more than three decades in February, the latest month for which data is available,” according to the Redfin report.
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