Realtor.com® October Rental Report: Rent Growth Hits Slowest Pace in 18 Months
Nearly 70% of renters surveyed are considering moving to save money as rent increases cut into monthly budgets and hinder savings
SANTA CLARA, Calif., Nov. 17, 2022 /PRNewswire/ -- Renters throughout the country are finally seeing a bit of relief when it comes to the seemingly relentless pace of rent growth. The Realtor.com® October Rental Report shows that nationally rent growth slowed to 4.7% year-over-year, its slowest pace in 18 months, with the median U.S. rent hitting $1,734. Additionally, The Avail, by Realtor.com®, 2022 Fall Landlord and Renter Survey found that while tenants are still struggling with affordability, the majority of landlords are planning increases in the next 12 months, albeit less than before.
"With soaring inflation and recession fears a huge concern for many consumers, finding affordable housing remains a priority for families. Our data indicates that we are finally starting to see a bit of relief from the double-digit pace of rent growth that we experienced during the height of the pandemic," said Danielle Hale, Chief Economist at Realtor.com®. "While it's still a bit early to say that we're officially on a downward trajectory for rent prices, the data shows a promising return toward normal seasonal slowdowns and suggests that the astronomical price gains of the past several years may be behind us."
October 2022 Rental Metrics – National
Unit Size | Median Rent | Change since Oct. 2021 | Change since Oct. 2019 |
Overall | $1,734 | 4.7 % | 23.5 % |
Studio | $1,457 | 6.7 % | 18.3 % |
1-bed | $1,611 | 4.5 % | 23.2 % |
2-bed | $1,901 | 3.7 % | 24.7 % |
Rent prices slowly falling from historic highs
The median rent in the top 50 U.S. metros in October was $1,734, down $25 from last month and $47 from the peak in July. This marks the third consecutive month of single-digit growth and the ninth consecutive month of slowing. However, the pace of growth was still nearly 1.5 times faster than it was in March 2020, just before the pandemic hit. During the late-fall and early-winter, rental demand typically slows, as it's a less popular time for households to make a move. This year is showing a return to a normal seasonal slowdown that we didn't see the last two years. Despite these cooling prices, renters are still feeling the sting of the sharp increases of the past several years.
Renters seek affordability after recent rent hikes
The Avail 2022 Fall Landlord and Renter Survey found that:
- Nearly two-thirds (63.2%) of renters who have been in their current unit for 12-24 months have seen their rent increase, up from 52.2% in July.
- The median monthly rent increase reported by survey respondents was $138 for lease renewals (compared to $160 in July) and $300 for new leases (the same as in July).
- Despite lower increases, affordability is still a major concern, as 69.5% who had experienced an increase are considering moving to a more affordable rental, up from 66.2% in July.
- Those considering moving are looking for a 12.5% cost reduction, or about $200 per month for the median renter. This is up from 10.3%, or about $125, in July.
Lower rent prices might not be easy to find, as most landlords plan to continue increasing rent
- More than two thirds (70.4%) of landlords plan to raise the rent of at least one unit within the next 12 months (down from 72.1% in July).
- However, there is some good news. The number of landlords planning to increase rent more than 10% shrunk from 25.4% of landlords in April to 18.3% in October.
"While it's encouraging to see smaller price increases, it's important to understand that many renters have already absorbed large increases in their monthly rental costs over the past several years, which is impacting their ability to save," said Ryan Coon, VP of Rentals at Realtor.com®. "High inflation and the cost of upkeep and repairs are hitting landlords, who have had to raise rents to cover their higher cost of owning the properties and making it unlikely that they'll be open to negotiating with new tenants."
Little room for negotiation as landlords feel the pinch
The increasing cost of ownership and market conditions have impacted landlords. However, there is a bit more room to negotiate for renewing tenants:
- While 34.7% of renters attempted to negotiate a smaller rent increase when their rent was most recently raised, only 6% of all renters were successful in doing so.
- Landlords surveyed were not likely to be open to negotiating, but were more likely with renewing tenants. Just 17% of landlords report being somewhat likely (14.4%) or extremely likely (2.6%) to allow a new renter to negotiate over the price of rent. But for renewing tenants, that increased to 21.9% being somewhat likely (17.5%) or extremely likely (4.4%) to negotiate.
- Increasing cost of ownership has led 80% of landlords to increase rent over the past 12 months. Among these landlords, 80.1% indicate that changes in rental market prices in their area influenced their decision to raise rent.
High rent prices impact the ability to save for a home
The typical renter reported being able to save just $100 per month, so it's not surprising that:
- Just 32.3% of renters are considering purchasing a home in the next 12 months, down from 34.6% in July.
- The biggest reasons cited were not having enough savings for a down payment (44.4%) and believing they would not qualify for a mortgage (19.6%).
- Among renters considering purchasing a home, 83.9% said that rising interest rates and inflation have impacted their plans to buy a home, up from 80.8% in July.
Avail provides informational resources for both renters and landlords via its rental resource center at: https://www.avail.co/education/resources
October 2022 Rental Metrics – 50 Largest U.S. Metro Areas
Metro | Overall Median | Overall Rent | Studio Median | Studio Rent | 1-br | 1-br Rent | 2-br Rent | 2-br Rent | |
$1,703 | -0.8 % | $1,661 | 2.8 % | $1,596 | -1.1 % | $1,859 | -0.4 % | ||
$1,703 | 2.0 % | $1,495 | 6.4 % | $1,551 | -0.5 % | $1,869 | 2.3 % | ||
$1,755 | 2.9 % | $1,363 | -1.0 % | $1,672 | 3.1 % | $1,894 | 4.0 % | ||
$1,137 | 3.1 % | $952 | -9.9 % | $1,055 | 1.8 % | $1,199 | 7.6 % | ||
$2,894 | 12.8 % | $2,706 | 25.0 % | $2,738 | 12.2 % | $3,152 | 11.0 % | ||
$1,164 | 0.0 % | $856 | 7.3 % | $1,202 | 10.6 % | $1,190 | 3.6 % | ||
$1,606 | 3.4 % | $1,511 | 8.6 % | $1,528 | 3.4 % | $1,725 | 2.4 % | ||
$2,032 | 23.7 % | $1,720 | 51.0 % | $1,951 | 22.4 % | $2,183 | 20.9 % | ||
$1,273 | 7.0 % | $1,182 | 8.6 % | $1,212 | 6.5 % | $1,444 | 7.6 % | ||
$1,169 | 4.6 % | $892 | 7.9 % | $1,096 | 0.3 % | $1,287 | 9.0 % | ||
$1,237 | 5.8 % | $962 | 7.0 % | $1,176 | 7.4 % | $1,319 | 3.5 % | ||
$1,595 | 5.8 % | $1,347 | 5.7 % | $1,445 | 4.5 % | $1,854 | 5.1 % | ||
$1,907 | 1.1 % | $1,607 | 1.3 % | $1,781 | 0.3 % | $2,211 | 1.0 % | ||
$1,247 | 8.6 % | $1,171 | 14.6 % | $1,099 | 7.7 % | $1,379 | 6.7 % | ||
$1,726 | 9.4 % | $1,607 | 18.4 % | $1,508 | 4.8 % | $1,894 | 2.7 % | ||
$1,376 | 2.9 % | $1,268 | 2.7 % | $1,267 | 2.7 % | $1,513 | 2.9 % | ||
$1,276 | 9.4 % | $1,114 | 8.7 % | $1,160 | 9.0 % | $1,341 | 4.3 % | ||
$1,463 | 1.3 % | $1,116 | 10.7 % | $1,341 | 1.2 % | $1,555 | -4.6 % | ||
$1,274 | 8.7 % | $1,019 | 8.8 % | $1,209 | 10.2 % | $1,479 | 8.9 % | ||
$1,533 | -2.5 % | $1,048 | 0.0 % | $1,428 | -2.1 % | $1,645 | -3.7 % | ||
$2,921 | 4.5 % | $2,288 | 7.1 % | $2,720 | 4.1 % | $3,381 | 4.3 % | ||
$1,089 | 3.3 % | $946 | 3.5 % | $1,018 | 4.7 % | $1,146 | 3.8 % | ||
$1,270 | -0.7 % | $1,107 | -6.5 % | $1,246 | -4.3 % | $1,346 | -1.6 % | ||
$2,686 | 8.4 % | $2,333 | 9.5 % | $2,384 | 8.4 % | $2,960 | 5.0 % | ||
$1,530 | 5.4 % | $1,263 | 8.1 % | $1,415 | 5.8 % | $1,704 | 0.3 % | ||
$1,527 | 2.7 % | $1,241 | 1.3 % | $1,452 | 2.1 % | $1,808 | 2.2 % | ||
$1,625 | 4.1 % | $1,600 | -1.1 % | $1,532 | 3.2 % | $1,681 | 3.6 % | ||
$1,393 | -3.7 % | NA | NA | NA | NA | NA | NA | ||
$2,779 | 12.7 % | $2,486 | 12.6 % | $2,395 | 8.9 % | $3,045 | 9.3 % | ||
$946 | 9.7 % | $768 | 6.9 % | $839 | 4.8 % | $1,032 | 13.3 % | ||
$1,805 | 5.9 % | $1,632 | 10.6 % | $1,679 | 6.2 % | $2,030 | 5.1 % | ||
$1,734 | 4.1 % | $1,441 | 12.3 % | $1,642 | 4.2 % | $1,844 | -0.8 % | ||
$1,625 | -1.6 % | $1,309 | -0.3 % | $1,489 | -2.7 % | $1,746 | -4.4 % | ||
$1,440 | 3.7 % | $1,198 | 13.3 % | $1,470 | 5.0 % | $1,475 | 1.0 % | ||
$1,774 | 5.1 % | $1,447 | 3.5 % | $1,678 | 3.4 % | $1,935 | 2.6 % | ||
$2,020 | 13.6 % | NA | NA | NA | NA | NA | NA | ||
$1,538 | 3.6 % | $1,412 | 3.6 % | $1,439 | 5.2 % | $1,682 | 4.0 % | ||
$1,371 | 5.6 % | $1,243 | 14.6 % | $1,256 | 8.5 % | $1,523 | 4.5 % | ||
$2,171 | -4.7 % | $1,492 | -14.6 % | $1,920 | -4.6 % | $2,188 | -2.9 % | ||
$1,350 | 8.0 % | $1,035 | 18.1 % | $1,314 | 12.7 % | $1,459 | 9.3 % | ||
$1,876 | -3.4 % | $1,586 | -9.4 % | $1,740 | -2.6 % | $2,012 | -0.5 % | ||
$1,324 | 4.7 % | $1,113 | 0.0 % | $1,199 | 3.7 % | $1,490 | 2.9 % | ||
$2,793 | 3.1 % | $2,285 | 6.4 % | $2,531 | 2.3 % | $3,076 | 0.9 % | ||
$3,031 | 5.8 % | $2,488 | 8.9 % | $2,767 | 3.5 % | $3,450 | 4.5 % | ||
$3,268 | 9.6 % | $2,582 | 9.0 % | $2,943 | 8.5 % | $3,620 | 9.1 % | ||
$2,161 | 2.7 % | $1,841 | 6.6 % | $2,113 | 1.4 % | $2,511 | 4.0 % | ||
$1,220 | 3.8 % | $947 | 4.1 % | $1,141 | 3.8 % | $1,283 | 1.4 % | ||
$1,784 | -2.5 % | $1,476 | -2.8 % | $1,650 | -2.2 % | $1,968 | -4.6 % | ||
$1,463 | 3.9 % | $1,386 | 19.5 % | $1,386 | 3.0 % | $1,480 | -2.4 % | ||
$2,126 | 4.9 % | $1,771 | 5.1 % | $2,008 | 3.0 % | $2,454 | 4.6 % |
Methodology
Rental data as of October 2022 for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. We use communities that reliably report data each month within the top 50 largest metropolitan areas. National rents were calculated by averaging the medians of the 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
The Avail 2022 Fall Landlord and Renter Survey collected responses from a nationally representative sample of more than 2,700 independent landlords and renters. The survey was conducted between November 1, 2022, and November 9, 2022. The margin of error for independent landlords is ± 3.1%, and ± 2.4% for renters. Avail (a part of Realtor.com®) regularly conducts rental market research to understand the needs of independent landlords and their renters. For additional resources for renters and landlords, visit: https://www.avail.co/blog
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
Share this article