Realtor.com® January Rental Report: Mild Relief for Renters Continues As Rental Prices Decline to Start New Year
In January, U.S. median rents dropped (-0.3%) for sixth straight month
SANTA CLARA, Calif., Feb. 22, 2024 /PRNewswire/ -- Rents fell in January for the sixth month in a row, with year-over-year prices down -0.3%, according to the monthly Realtor.com® Rental Report released today. That's providing some relief for renters, though prices remain higher than pre-pandemic levels amid strong demand and a limited supply of new units in many markets.
In January, the median asking rent for 0-2 bedroom units in the 50 largest metros declined to $1,712, down $5 from the previous January and $46 below its August 2022 high. Following this trend, a recent Realtor.com® Avail Landlord & Renter Survey found that the percentage of landlords planning to raise rents in the next 12 months declined in recent quarters. Still, prices are 18.3% higher than they were four years ago. Median rents were mixed across unit sizes. Regionally, some big Western metro markets began to rebound while supply of new multifamily housing units outstripped demand in the South, pushing down prices.
"Rental prices are declining, especially in places where new units are entering the market, but there's still plenty of demand driven by the large population of renters, including potential first-time homebuyers who remain on the sidelines for now," said Danielle Hale, Chief Economist at Realtor.com®. "Looking forward, Realtor.com® anticipates the rental market to decline only slightly in 2024, as an increase in the supply of new units is balanced out by continued enthusiasm for renting as a more affordable alternative to purchasing."
January 2024 Rental Metrics by Unit Size – National
Unit Size | Median Rent | Rent YoY | Rent Change - 4 years |
Overall | $1,712 | -0.3 % | 18.3 % |
Studio | $1,434 | -1.0 % | 11.9 % |
1-bed | $1,591 | 0.1 % | 17.9 % |
2-bed | $1,892 | -0.6 % | 20.4 % |
Studios saw largest rent declines
The median asking rent for studios fell by -1.0% to $1,434, which is down -3.8% from its October 2022 peak but still 11.9% higher than four years ago. Asking rents for two-bedroom units declined by -0.6% to $1,892. Those larger units still saw the highest growth in rent prices over the past four years, with an increase of $321 (20.4%). Meanwhile, asking rents for one-bedroom units rebounded after declining since July 2023, increasing by 0.1% year over year to $1,591 in January. Demand for one-bedroom units may be fueled by the perception that they're a sweet spot in the market: more spacious than a studio and more affordable than a two-bedroom unit.
Big Western Metros started to see rebound
In January 2024, the median rent in the West fell by -0.3% from a year ago, led by declines in areas including Phoenix (-4.0%), Riverside, Calif. (-2.6%) and Las Vegas (-1.8%). But rents rebounded in some big metros, with Los Angeles (0.2%) and Seattle (1.3%) showing year-over-year increases following eight straight months of decline. With home prices still high and mortgage rates expected to remain elevated in the short term, many first-time buyers are choosing instead to rent. Rents are rising faster in big Northeastern metros such as New York (2.3%) and Boston (2.7%), where labor markets are strong and there's slow growth in new housing stock, putting upward pressure on rents.
Rents grow in Midwest markets, drop in the South
Asking rents in the Midwest rose by 0.2% in January, bolstered by markets such as Chicago (4.2%), Indianapolis (3.5%) and Kansas City, Mo. (3.1%). These markets are enjoying low unemployment, which stokes rental demand, and they remain affordable in comparison with other parts of the country. Chicago's median rent of $1,852 is almost $1,000 less than big-city counterparts New York ($2,844) and Los Angeles ($2,829). Meanwhile, the median asking rent fell by 1.2% in the South, led by year-over-year declines in Memphis, Tenn. (-5.5%), Atlanta (-3.8%), Austin, Texas (-3.6%). St. Louis, Mo. (-3.6%) and Miami (-3.4%). Unemployment in the South is also low, but the supply of new multifamily housing is growing, pushing down rental prices.
Rental Data – 50 Largest Metropolitan Areas – January 2024
Metro | Median Rent (0-2 Bedrooms) | YOY (0-2 Bedrooms) |
$1,619 | -3.8 % | |
$1,547 | -3.6 % | |
$1,790 | -0.6 % | |
$1,245 | -0.8 % | |
$2,981 | 2.7 % | |
NA | NA | |
$1,542 | -0.1 % | |
$1,852 | 4.2 % | |
$1,318 | 1.4 % | |
$1,217 | -2.0 % | |
$1,178 | -2.5 % | |
$1,505 | -1.0 % | |
$1,922 | 0.3 % | |
$1,308 | -0.3 % | |
NA | NA | |
$1,394 | 2.8 % | |
$1,288 | 3.5 % | |
$1,534 | -2.2 % | |
$1,318 | 3.1 % | |
$1,489 | -1.8 % | |
$2,829 | 0.2 % | |
$1,234 | 2.7 % | |
$1,247 | -5.5 % | |
$2,373 | -3.4 % | |
$1,574 | -0.9 % | |
$1,491 | -0.4 % | |
$1,613 | -2.3 % | |
NA | NA | |
$2,844 | 2.3 % | |
$988 | 2.2 % | |
$1,682 | -1.9 % | |
$1,780 | -2.0 % | |
$1,550 | -4.0 % | |
$1,421 | 1.1 % | |
$1,656 | -0.7 % | |
NA | NA | |
$1,529 | -1.5 % | |
$1,492 | -0.1 % | |
$2,174 | -2.6 % | |
NA | NA | |
$1,844 | 0.9 % | |
$1,275 | 1.0 % | |
$2,811 | 1.1 % | |
$2,837 | -0.6 % | |
$3,217 | 2.9 % | |
$2,012 | 1.3 % | |
$1,295 | -3.6 % | |
$1,740 | -1.1 % | |
$1,508 | -0.4 % | |
$2,194 | 1.9 % |
Methodology
Rental data as of January 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
With the release of its January 2024 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since January 2024 will not be directly comparable with previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
Media contact:
Sara Wiskerchen, press@realtor.com
SOURCE Realtor.com
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