05/16/2023
Rents Flat in April: 11th Month for Slowing Growth
According to a report by Redfin, the median rent in the United States increased by only 0.3% in April compared to the previous year. This marks the 11th consecutive month of slower rent growth. In March of this year, rents rose by 1.4%, while a year ago they went up by 16%.
Interestingly, in April, there was actually a slight decrease of 0.2% in the median rent compared to the previous month. This is noteworthy because rents typically rise during this time of the year.
The main reason for the slowdown in rent growth is the increased number of rental units available. Over the past decade and a half, there has been a boom in homebuilding, leading to a greater supply of rental properties. As a result, landlords are now facing higher vacancy rates. In March, the completion of residential projects in buildings with five or more units increased by 60% compared to the previous year.
This surge in completed projects is one of the highest recorded since the 1980s, and it has contributed to a rental vacancy rate of 6.4% in the first quarter, the highest in two years.
According to Redfin Deputy Chief Economist Taylor Marr, the balance of power in the rental market is shifting in favor of tenants due to the increased supply of rental units. This is providing renters with more flexibility to negotiate and is easing affordability challenges in some areas. However, if homebuilders slow down construction in response to the slower rent growth, the scales could tip back in favor of landlords.
Rent growth is also slowing down because many people are choosing to stay in their current rental properties. Economic uncertainty, high rental costs in certain markets, and the rising costs of other goods and services due to inflation are all factors contributing to this trend.
Here are the top markets for decreasing and increasing rents in
Top Markets for Decreasing Rents in April:
Austin, Texas: Down 14.3%
Phoenix, Arizona: Down 9.6%
Las Vegas: Down 7.1%
Oklahoma City, Oklahoma: Down 6.4%
Chicago: Down 6%
Birmingham, Alabama: Down 4.5%
Sacramento, California: Down 4%
Memphis, Tennessee: Down 3.6%
Seattle: Down 3.2%
Dallas, Texas: Down 2.8%
Top Markets for Increasing Rents in April:
Providence, Rhode Island: Up 16%
Raleigh, North Carolina: Up 12.4%
Indianapolis, Indiana: Up 10.9%
Charlotte, North Carolina: Up 10.5%
Cleveland, Ohio: Up 9.7%
Columbus, Ohio: Up 8.3%
Kansas City, Missouri: Up 8%
Milwaukee, Wisconsin: Up 8%
Pittsburgh: Up 7.9%
Nashville, Tennessee: Up 7%
Interpretation from the original article by
Kerry Smith, Florida Realtorsยฎ