Rent growth isn’t in reverse yet, but a recent cool streak could mean it’s just a matter of time before prices begin declining across the country.
The median asking rent in the country rose 2.4 percent year over year in January to $1,942, according to Redfin. The monthly report cited growing supply and declining demand as drivers behind the smallest annual increase in rent since May 2021.
The figure is a fraction of the growth rate reported in January 2022, when the nation’s median asking rent rose 15.6 percent from the previous year.
January was the eighth straight month of slowing rent growth, along with a monthly decline, dropping 1.9 percent from December and down 5.4 percent from an August peak.
Redfin chief economist Daryl Fairweather said the group was “watching closely to see whether rents start falling year over year” as growing supply is expected to boost the nationwide rental vacancy rate and continue to slow rental prices.
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Some markets are already seeing year-over-year declines in rent. Phoenix, one of the hottest housing markets during the pandemic, was one of 11 major markets that saw a decrease in rent, leading the way with a 6.7 percent decrease from last year. Houston (4.9 percent), Chicago (3 percent) and Austin (0.4 percent) were also among those seeing year-over-year rent price drops.
Other markets saw rents increase, sometimes significantly. In four markets, rents jumped by 10 percent or more year over year. Raleigh saw the biggest rent increase, spiking 22.5 percent from last year.
New York was the only market where the median asking rent was over $4,000, coming in with a 6 percent increase from a year ago to $4,015.