In the US, runaway rent increases have eased as the post-pandemic construction surge has created a much-needed supply of housing.
According to Redfin, asking rents fell year-over-year for all apartment sizes last month, a trend last seen in June 2020.
The real estate listings website said that in July, median asking rents for one- and no-bedroom apartments fell by 0.1%, for two-bedroom apartments by 0.3% and for apartments with three or more bedrooms by 2.4%.
“Rents have recently stabilized – or even declined slightly – due to the sheer number of apartments built in the past two years,” Sheharyar Bokhari, senior economist at Redfin, said in the report.
In every bedroom category, the price is at least $50 below the all-time high of the last two years.
After the pandemic, housing construction went into overdrive as builders rushed to address the country’s significant supply deficit.
The focus on building smaller apartments was particularly effective: As Redfin previously reported, studio rents fell 20.9 percent year-on-year in the first quarter.
However, Bokhari added that tenants cannot assume that the price decline will last forever:
“Construction activity is slowing and prices will eventually rise again, but now is still a good time for renters to get a bargain, especially for families looking for a home with at least three bedrooms.”
Last month, Redfin reported that building permits for apartments have fallen nearly 30% since the pandemic. As new housing inventory dwindles, owners could start raising rents again within a year or two, Bohkari said at the time.
However, the decline in rents varies from region to region.
Redfin found that Florida and Texas are leading the trend, with construction activity in both states outpacing other regions. In Austin, Texas, rents fell 16.9% year over year, while Jacksonville, Florida, saw a 14.3% drop.
However, rents increased in some metropolitan areas, particularly on the East Coast and in the Midwest. Virginia Beach, Virginia, saw the largest increase, with rents up 13.7% year over year.
Today, the national vacancy rate remains at its highest level since 2021 and landlords are looking for ways to solve the problem.
According to Zillow, a third of property managers offer incentives such as free parking to attract new renters.
While rents fell across all bedroom counts, the national median asking rent actually rose 0.4% last month compared to the same period last year when all property types are combined, Redfin said.
