Rental price growth continued its march downward in October, with the median national rent dropping below $2,000 for the first time in six months, according to a report released this month from Rent, a listing portal.
Overall, rents were nearly a percentage point lower compared to the previous month, falling 0.97% from September to reach $1,983, Rent.com said. That marks two months of declining monthly prices, since September notched the “first real monthly decline since February 2021 and the largest monthly decline since September 2020” at 2.5%, according to the analysis.
Still, that’s unlikely to make much of an immediate difference for tenants, since rents are up 7.8% from last year.
Nonetheless, “that’s lower than the 8.79% that we saw in September, and it’s the second consecutive month yearly increases have been in the single digits,” Jon Leckie, a researcher at Rent.com, told MarketWatch.
Pre-pandemic, annual rent increases were pretty much tracking inflation, gaining by 2% to 4%, Leckie said. In January 2020, meanwhile, the median rent was $1,585, according to Leckie — meaning many tenants may have price increases worth hundreds of dollars since then, with rents up about 25%.
“‘Landlords are going to be much more willing to work with a tenant that they know, particularly if they’ve been a good tenant, than taking a risk on a new tenant.’”
— Jon Leckie, a researcher at Rent.com
“It’s true that month-over-month rents have dropped over the past two months, but if you signed a lease a year ago, those year-over-year increases are still up, so practically, when you go to sign your lease, you’re going to see an increase,” Leckie said. “For renters, it just means that things are more expensive, and get ready to pay more.”
If renters are looking to negotiate, “if you’re in a place that you like, and you can afford it, think about staying,” Leckie said. “Landlords are going to be much more willing to work with a tenant that they know, particularly if they’ve been a good tenant, than taking a risk on a new tenant.”
Rents may continue to drop over the winter, though, since demand is decreasing. Economists at the Federal Reserve Bank of Dallas said in August that rental inflation is expected to moderate by the middle of next year.
On the local level, of the 50 metros Rent.com analyzed, Oklahoma City led annual rent increases in October at 31.7%. The Raleigh-Cary metropolitan area in North Carolina followed at an increase of 21%, and the Cincinnati region at 17%. The Austin, Texas, metropolitan area led annual rent decreases, meanwhile, falling 8.7% — which the researchers described as “much-needed.”
Out of the states, Florida’s market continues to dominate year-over-year rent increases at 23.2%, Rent said. Massachusetts has declined the most, albeit at a moderate dip of 3.1%.