- Rents rose last quarter, according to a new study of over 750 US real-estate markets.
- Both tenants and homebuyers lost out as prices remained elevated.
- Here are 19 places where rents declined by at least 5%.
Renters might not have many reasons to celebrate after all.
Landlords consistently increased rents across the US in the third quarter, according to new data from real-estate site Rentometer. The hikes were modest but unmistakable, rising 0.5% from the second quarter and 3% from 2023 — a bit above last month’s inflation rate, which came in hot.
That appears to clash with recent rent reports from Realtor.com and rental listings site Zumper, which found that apartment prices in the largest US cities declined modestly in September.
However, this isn’t an apples-to-apples comparison, as Rentometer’s report encompasses all of the third quarter and 757 markets across six regions, instead of just the 50 or 100 biggest ones.
Just like with inflation, there are at least two ways to interpret this data. The glass-half-full view is that price increases for single-family rental units are rather low, at least compared to the surges early in the pandemic. But while the rate of price increases is slowing, even from the prior quarter, renters are still coughing up more than they were last year, according to Rentometer’s report.
Anyone who doesn’t own property is caught between a rock and a hard place, as rent is up but property prices remain exorbitant. Mortgage rates are also climbing again, even though they’re down significantly from their peak last fall. That’s why home sales have continued to tumble.
Those affordability constraints “have kept many would-be buyers in the rental market,” researchers at Rentometer wrote in their October 23 report. However, they noted that the places with major home-price growth also had some of the fastest rent growth.
Softer demand hasn’t hurt home prices because of the long-standing housing market shortage. There’s a similar dynamic going on in the single-family rental market, according to Rentometer.
“While apartment rents have softened due to a boom in new construction leading to increased competition and higher vacancy rates, there has been limited new construction for single-family rentals,” researchers at Rentometer wrote. “The vast majority of single-family rentals come from existing housing stock.”
Fewer single-family units to choose from means that tenants have less bargaining power and may be forced to accept rent increases. Of course, property owners aren’t complaining.
19 cities where rent is quickly sliding
Although rent broadly is on the upswing, there are many cities where single-family rental units are getting cheaper, even if they’re admittedly few and far between. Of the 757 real-estate markets in Rentometer’s analysis, only 110 saw rents decline in the third quarter.
Savings on single-family rental units were hardest to find in the Midwest and Northeast, where prices were each up over 9% compared to the third quarter of 2023. Renters may have had better luck in the Southeast and Southwest, where prices were up 3.6% and 2.2%, respectively.
However, those who look in the right places can still score deals. Business Insider analyzed Rentometer’s data and found that rent fell by at least 5% in 19 markets. Below are those places, along with their average rent and rent growth in the third quarter, plus their region.
Read the full article here
