Are rents finally coming down?
There may be moderate relief for renters, but a return to pre-pandemic prices is not likely, analysts said.
After record levels of rental housing demand in 2021, there has been a significant slowdown in leasing this year, and price growth is starting to slow as well, according to Jay Parsons, chief economics officer at RealPage, a housing software company. rental.
Demand for market rate rentals in the third quarter was negative, meaning there were more people leaving apartments than entering them – the first time this had happened during the summer months typically charged in 30 years, Mr. Parsons said.
The slowdown resulted in the first month-over-month price decline since December 2020 – a meager 0.2% decline in September. Still, rent at the national market rate — $1,797 a month — is up 9% from the same month a year ago, in part because inventory remains low.
RealPage expects national market rate rent to increase 3.3% next year, more in line with typical rent growth.
This is cold comfort for tenants in high-cost markets like New York, where rising rents exceeded salary increases 23% in August, after adjusting for inflation, according to Kenny Lee, economist at StreetEasy, a classifieds site. Along with the major housing disruption at the start of the pandemic, this marks the biggest gap since the 2008 financial crisis.
September’s median rent, $3,982, was up nearly 24% from a year ago, though it was down 2% from the previous month, according to a report by Douglas Elliman, an agency real estate. Renters might have more clout during the generally slower winter months, said Jon Leckie, a researcher at Rent, an SEO portal.
“If you have a few months to work and you don’t need to sign now, I’ll wait,” he said.
For weekly email updates on residential real estate news, register here. Follow us on twitter: @nytrealestate.