Realtor.com® March Rental Report: California Markets See First Rent Decline in 2 Years

While expensive markets in the West saw declines, prices in the more affordable Midwest continued to rise even faster

SANTA CLARA, Calif., April 25, 2023 /PRNewswire/ -- The Realtor.com^® March Rental Report found a split in rental price trends, with some of the country's most expensive markets seeing year-over-year price declines, while more affordable markets continued to grow at an even faster pace, as consumers sought affordability after the past several years of quick growth and high rental prices.

"Mirroring trends that we've seen in the for-sale market, affordability is shaping housing demand, with lower-cost areas continuing to see stronger rent growth, home price increases, and competitive real estate markets. Markets in the Midwest and Northeast are benefiting from this trend while cities in the West are adjusting in the opposite direction," said Realtor.com^® Chief Economist Danielle Hale. "The good news for renters is that overall rent prices and price growth have both cooled from their highs in early 2022, offering some relief for cost-burdened consumers who are facing higher prices across the board."

California rent prices on the decline; Midwest picking up speed

In March, 14 markets saw year-over-year price declines, including San Francisco (-0.8%) and Los Angeles (-0.8%), which saw their first year-over-year declines in 2 years. Riverside-San Bernardino, Calif. (-5.3%) and Sacramento, Calif. (-2.1%) also saw declines in March. These declines could be connected by tech layoffs and a weakening job market in the state.

On the flip side, Midwestern markets including Indianapolis, Ind. (10.3%), Cincinnati, Ohio (9.6%), and Milwaukee, Wisc. (7.8%) continued to rise quickly year-over-year. Rent growth rates in Sun Belt markets, which grew very quickly during the pandemic, continued to slow (0.2%), but the median asking rent was still $408 (27.2%) higher than four years ago (pre-pandemic). 

Rents up significantly since the pandemic began 

Nationally, the U.S. rental market experienced single-digit growth for the eighth month in a row after 14 months of slowing from its high of 16.4% growth in January 2022. The median rent in the 50 largest metros increased to $1,732, up by $15 from last month and down $32 from last year's peak. However, this is still $354 (25.7%) higher than the same time in 2019 before the pandemic.

Rental Data – 50 Largest Metropolitan Areas – March 2023

Methodology

Rental data as of March 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 March 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 March 2023 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: [email protected]

SOURCE Realtor.com