Published by REALTOR.com | July 25, 2023
This is the second month in a row that rents are down.
Rents are continuing to fall—but not enough to give renters much of a break.
In June, rents dropped 1% year over year, to a median of $1,745 a month nationally in the 50 largest housing markets, according to a recent report from Realtor.com®. This is the second month in a row that rents are down.
But before renters break out the bubbly, rents fell just $31 from the peak last July. And their monthly bills are roughly 24%, or $339, higher than they were before anyone had ever heard of COVID-19 in June 2019.
“The decline in rent prices continues to bring relief to renters, and it’s encouraging for renters’ budgets,” says Realtor.com economist Jiayi Xu. “Even though rents have declined, affordability is still the biggest challenge. The rents are still very, very high.”
The good news for renters struggling to get by is there are a record number of apartments under construction, about 1 million. Once those go online, landlords might be forced to lower prices to attract tenants.
“Rents will continue to decline, but by very small declines,” says Xu. “When we see an increase in the supply of rental properties, we expect the rental prices to soften a little bit.”
Ironically, renters are paying more for smaller spaces in their effort to save money. Demand for studios, typically the cheapest apartments, remained strong as tenants sought ways to cut their expenses. Studio prices rose 1%, to about $1,445 a month in June.
Rents dipped a little, 0.7%, for one-bedroom apartments and were down 1% for two-bedroom units. Nationally, renters paid about $1,630 a month for one bedroom and $1,945 for two bedrooms in June.
