October Rental Advise: Rent Prices Tumble for the Third Straight Month

October Rental Advise: Rent Prices Tumble for the Third Straight Month

Highlights

  • October 2022 marks the ninth month of slowing rent improve, and the third month in a row with a single-digit rate for 0-2 bedroom properties (4.7% Y/Y).
  • The median asking rent in the 50 most engrossing metros declined to $1,734, down by $25 from final month and $47 from July’s peak. 
  • The Avail, by Realtor.com®, 2022 Tumble Landlord and Renter Examine printed that most renters accept as true with already absorbed most up-to-date rent increases, and neither negotiating for smaller rent increases nor transferring to a sleek unit, has aided affordability. 
  • Rents in Sun Belt metros slowed to 1.8% Y/Y. Unique Orleans, LA (-3.7%), Phoenix, AZ (-1.6%), Atlanta, GA (-0.8%), and Memphis, TN (-0.7%) experienced their first detrimental year-over-year alternate since the onset of the COVID-19 pandemic. 
  • Studio rents saw the first single-digit improve rate in 14 months. Rent by dimension: Studio: $1,457, up 6.7% ($92) year-over-year; 1-mattress: $1,611, up 4.5% ($69); 2-mattress: $1,901, up 3.7% ($67).
  • Examine outcomes display masks most landlords clean blueprint to assemble bigger rent over the next 12 months, however the size of deliberate increases has fallen.
  • Fresh rent increases, inflation, and rising hobby charges are impacting renter plans to steal a house, with many reporting they could well well delay their steal and continue renting for now.

Year-Over-Year Rent Disclose Dips for the Ninth Month in a Row

In October 2022, the U.S. condominium market experienced single-digit improve for the third month in a row after nine months of slowing from January’s peak 17.4% improve. The median rent improve all the arrangement in which by the tip 50 metros slowed to 4.7% year-over-year for 0-2 bedroom properties. It’s the lowest improve rate in 18 months however is clean virtually 1.5 cases sooner than the improve rate viewed simply sooner than the pandemic hit in March 2020. The median asking rent was $1,734, down by $25 from final month and $47 from the peak.  

The deceleration from most up-to-date highs is in step with what we accept as true with viewed in most up-to-date for-sale knowledge, suggesting that more fashioned seasonal cooling is returning to the condominium market. All around the slack drop and early iciness, condominium establish a question to generally slows as fewer households pass. To boot, with the mortgage rate for a fashioned 30-year mounted-rate mortgage hovering spherical 7% and inflation running at a forty-year high, homebuilding exercise continues to lean into multi-family properties. This increases the provision of condominium properties inspiring market balance, serving to to mood rent improve. In fact, the most up-to-date uptick in the condominium vacancy rate is extra evidence that establish a question to would no longer outmatch condominium offer as it has in the final 18 months.

Figure 1: Year-over-Year Rent Construction

Renters Are Silent Financially Strained No topic Cooling Rents

No topic cooling rents, the Avail, by Realtor.com®, 2022 Tumble Landlord and Renter Examine realized that most renters accept as true with already absorbed most up-to-date rent increases. Three out of 4 renters (74.2%) who accept as true with moved in the previous 12 months reported seeing their rent assemble bigger. 

The stress from most up-to-date rent hikes isn’t uncommon to renters who accept as true with currently moved. Just about 2-thirds of renters (63.2%) who accept as true with lived in their most up-to-date condominium between 12 and 24 months, and hasten renewed their rent, accept as true with moreover reported increases in their rent. The portion of these renters who accept as true with viewed rent upward thrust is up very much from July, when 52.2% reported rent increases. These renewing renters saw a median monthly rent assemble bigger of $138, down from $160 in July. 

No topic most up-to-date rent hikes, few renters file making an are trying to negotiate with their landlords for a smaller rent assemble bigger, and even fewer file negotiating efficiently. About one-third of surveyed renters (34.7%) tried to negotiate a smaller assemble bigger when their landlord most currently raised their rent. Of those renters, simplest 17.3% had been ready to trusty a decreased assemble bigger (6% of all renters). 

Many renters are moreover angry about transferring to search out more affordability. Just about 7-in-10 renters (69.5%) who accept as true with experienced a most up-to-date rent assemble bigger are angry about transferring to a more more cost-effective condominium, up from 66.2% in July. These angry about transferring are having a gape for a 12.5% label reduction, or about $200 per month for the median renter—up from 10.3%, or about $125, in July. Renters having a gape for more affordability by transferring can also fight to search out it, however. Other folks that moved in the previous 12 months reported a median rent assemble bigger of $300 per month. 

Sun Belt Rents Proceed to Frigid Down Sooner 

Renters who are attracted to living in Sun Belt regions can also feel a sooner market cooling off than fairly about a parts of the nation. In step with Realtor.com® knowledge, in October 2022, the year-over-year improve rate for 0-2 bedroom properties all the arrangement in which by Sun Belt metros was 1.8%, 2.9 share sides decrease than the nationwide life like. Identical to final month’s discovering, metros with detrimental improve charges are all clustered in the Sun Belt regions. In October, rent declined in Riverside, CA (-4.7%), Sacramento, CA (-3.4%), Tampa, FL (-2.5%), and Las Vegas, NV (-2.5%) on a year-over-year basis for a 2d month. To boot, rents in Unique Orleans, LA (-3.7%), Phoenix, AZ (-1.6%), Atlanta, GA (-0.8%), and Memphis, TN (-0.7%) moreover experienced their first year-over-year dip since the onset of the pandemic. While Sun Belt markets accept as true with cooled sooner than fairly about a parts of the nation in most up-to-date months, the median asking rent in the aim was clean 28.6% bigger than three years ago (pre-pandemic), bigger than nationwide rent improve for the an identical three-year duration (23.6%).

Studio Rents Saw the First Single-Digit Disclose Price in 14 Months

In October, two-bedroom items saw a single-digit improve rate for the third month in a row. The median rent continues to fall, down by $41 from final month and $83 from July’s peak. The median rent for two bedrooms was $1,901 nationally, $67 (3.7%) bigger than the an identical time final year and up by $377 (24.7%) in contrast to three years ago. 

Rent improve for one-bedroom items moreover saved cooling. The median rent for 1-bedroom items was $1,611, down by $36 in contrast to final month and $54 much less from the peak. On the different hand, it’s miles clean up by $69 (4.5%) in contrast to the outdated year and 23.2% ($303) bigger since October 2019 (sooner than the Covid-19 pandemic).

In October 2022, studios saw the first single-digit improve rate in 14 months. The median rent for studio items was $1,457, down by $26 in contrast to final month and $41 from the peak. Alternatively, it was clean up by $92 (6.7%) year-over-year and $225 (18.3%) bigger than three years ago. 

Table 1: National Rents by Unit Dimension
Unit Dimension Median Rent Rent YoY Rent Commerce – 3 years

Overall

$1,734 4.7% 23.5%
Studio $1,457 6.7%

18.3%

1-mattress $1,611 4.5%

23.2%

2-mattress $1,901 3.7%

24.7%

Figure 2: National Rent Construction by Unit Dimension

Landlords Are Planning Smaller Rent Will improve 

Landlords accept as true with taken impress of the altering condominium market landscape, and are planning smaller rent increases than in outdated quarters. In step with the Avail, by Realtor.com®, 2022 Tumble Landlord and Renter Examine, 70.4% of surveyed landlords clean blueprint to take care of the rent of at the least in actual fact one of their condominium items internal the next 12 months, though that prefer is down from 72.1% reported in both April and July. 

While most landlords are clean planning to take care of the rent, simplest 18.3% predict to assemble bigger it by bigger than 10%, down very much from 25.4% of surveyed landlords in April. Meanwhile, the portion of landlords anticipating to take care of rent by decrease than 5% climbed to 34.1%, up from 28.5% in July. Amongst these landlords, four in five (80%) display masks that increasing label of possession has impacted their plans to take care of rent, while 80.1% cited adjustments in condominium market prices in their aim as having influenced their decision-making. 

Even when deliberate increases are cooling, most landlords are no longer willing to negotiate with tenants over rent prices. In step with the gape, simplest 17% of landlords file being somewhat seemingly (14.4%) or extraordinarily seemingly (2.6%) to permit a sleek renter to negotiate over the value of rent. But for renewing tenants, landlords are a runt more flexible, with 21.9% reporting being somewhat seemingly (17.5%) or extraordinarily seemingly (4.4%) to negotiate on rent label. 

Avail, by Realtor.com®, affords a increasing library of resources to again unbiased landlords effectively arrange their condominium properties. Landlords can fetch entry to free condominium kinds, in-depth guides, housing research, and more from one convenient plot.   

Dwelling-Shopping Plans Are Silent Being Impacted as Renters Wrestle to Set

Ongoing financial challenges accept as true with resulted in a decline in renters angry about buying a house in the next 12 months. No longer as much as one-third of renters (32.3%) blueprint to pursue home possession in the approaching year, down from 34.6% in July. Amongst these renters, 83.9% display masks that inflation and rising hobby charges impacted their plans—up from a reported 80.8% in July 2022. These no longer planning to steal a house most repeatedly cite no longer having enough savings for a down fee (44.4%) or believing they would no longer qualify for a mortgage (19.6%). 

Amongst renters who talked about their plans had been impacted by rising hobby charges and inflation, 67.5% are angry about delaying the steal of a house and continuing to rent as a replacement. On the different hand, the median renter household reported no assemble bigger in how much they’ll set per month ($100), in step with gape findings from July. This lack of enchancment in renter household budget can also continue to reason renters to reassess their plans to steal a house.

Realtor.com® affords renters a rent vs. elevate calculator to again them select whether having a gape for is intellectual. The calculator can again renters estimate the size of tenure well-known for having a gape for to assemble more financial sense than renting and enables renters to customize for plot and tax specification. 

Appendix: Rental Data – 50 Largest Metropolitan Areas -October 2022

Metro Overall Median Rent Overall Rent YY Studio Median Rent Studio Rent YY 1-br Median Rent 1-br Rent YY 2-br Median Rent 2-br Rent YY
Atlanta-Sandy Springs-Roswell, GA $1,703 -0.80% $1,661 2.80% $1,596 -1.10% $1,859 -0.40%
Austin-Spherical Rock, TX $1,703 2.00% $1,495 6.40% $1,551 -0.50% $1,869 2.30%
Baltimore-Columbia-Towson, MD $1,755 2.90% $1,363 -1.00% $1,672 3.10% $1,894 4.00%
Birmingham-Hoover, AL $1,137 3.10% $952 -9.90% $1,055 1.80% $1,199 7.60%
Boston-Cambridge-Newton, MA-NH $2,894 12.80% $2,706 25.00% $2,738 12.20% $3,152 11.00%
Buffalo-Cheektowaga-Niagara Falls, NY $1,164 0.00% $856 7.30% $1,202 10.60% $1,190 3.60%
Charlotte-Harmony-Gastonia, NC-SC $1,606 3.40% $1,511 8.60% $1,528 3.40% $1,725 2.40%
Chicago-Naperville-Elgin, IL-IN-WI $2,032 23.70% $1,720 51.00% $1,951 22.40% $2,183 20.90%
Cincinnati, OH-KY-IN $1,273 7.00% $1,182 8.60% $1,212 6.50% $1,444 7.60%
Cleveland-Elyria, OH $1,169 4.60% $892 7.90% $1,096 0.30% $1,287 9.00%
Columbus, OH $1,237 5.80% $962 7.00% $1,176 7.40% $1,319 3.50%
Dallas-Citadel Price-Arlington, TX $1,595 5.80% $1,347 5.70% $1,445 4.50% $1,854 5.10%
Denver-Aurora-Lakewood, CO $1,907 1.10% $1,607 1.30% $1,781 0.30% $2,211 1.00%
Detroit-Warren-Dearborn, MI $1,247 8.60% $1,171 14.60% $1,099 7.70% $1,379 6.70%
Hartford-West Hartford-East Hartford, CT $1,726 9.40% $1,607 18.40% $1,508 4.80% $1,894 2.70%
Houston-The Woodlands-Sugar Land, TX $1,376 2.90% $1,268 2.70% $1,267 2.70% $1,513 2.90%
Indianapolis-Carmel-Anderson, IN $1,276 9.40% $1,114 8.70% $1,160 9.00% $1,341 4.30%
Jacksonville, FL $1,463 1.30% $1,116 10.70% $1,341 1.20% $1,555 -4.60%
Kansas City, MO-KS $1,274 8.70% $1,019 8.80% $1,209 10.20% $1,479 8.90%
Las Vegas-Henderson-Paradise, NV $1,533 -2.50% $1,048 0.00% $1,428 -2.10% $1,645 -3.70%
Los Angeles-Long Seaside-Anaheim, CA $2,921 4.50% $2,288 7.10% $2,720 4.10% $3,381 4.30%
Louisville/Jefferson County, KY-IN $1,089 3.30% $946 3.50% $1,018 4.70% $1,146 3.80%
Memphis, TN-MS-AR $1,270 -0.70% $1,107 -6.50% $1,246 -4.30% $1,346 -1.60%
Miami-Citadel Lauderdale-West Palm Seaside, FL $2,686 8.40% $2,333 9.50% $2,384 8.40% $2,960 5.00%
Milwaukee-Waukesha-West Allis, WI $1,530 5.40% $1,263 8.10% $1,415 5.80% $1,704 0.30%
Minneapolis-St. Paul-Bloomington, MN-WI $1,527 2.70% $1,241 1.30% $1,452 2.10% $1,808 2.20%
Nashville-Davidson–Murfreesboro–Franklin, TN $1,625 4.10% $1,600 -1.10% $1,532 3.20% $1,681 3.60%
Unique Orleans-Metairie, LA $1,393 -3.70% NA NA NA NA NA NA
Unique York-Newark-Jersey City, NY-NJ-PA $2,779 12.70% $2,486 12.60% $2,395 8.90% $3,045 9.30%
Oklahoma City, OK $946 9.70% $768 6.90% $839 4.80% $1,032 13.30%
Orlando-Kissimmee-Sanford, FL $1,805 5.90% $1,632 10.60% $1,679 6.20% $2,030 5.10%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD $1,734 4.10% $1,441 12.30% $1,642 4.20% $1,844 -0.80%
Phoenix-Mesa-Scottsdale, AZ $1,625 -1.60% $1,309 -0.30% $1,489 -2.70% $1,746 -4.40%
Pittsburgh, PA $1,440 3.70% $1,198 13.30% $1,470 5.00% $1,475 1.00%
Portland-Vancouver-Hillsboro, OR-WA $1,774 5.10% $1,447 3.50% $1,678 3.40% $1,935 2.60%
Providence-Warwick, RI-MA $2,020 13.60% NA NA NA NA NA NA
Raleigh, NC $1,538 3.60% $1,412 3.60% $1,439 5.20% $1,682 4.00%
Richmond, VA $1,371 5.60% $1,243 14.60% $1,256 8.50% $1,523 4.50%
Riverside-San Bernardino-Ontario, CA $2,171 -4.70% $1,492 -14.60% $1,920 -4.60% $2,188 -2.90%
Rochester, NY $1,350 8.00% $1,035 18.10% $1,314 12.70% $1,459 9.30%
Sacramento–Roseville–Arden-Arcade, CA $1,876 -3.40% $1,586 -9.40% $1,740 -2.60% $2,012 -0.50%
San Antonio-Unique Braunfels, TX $1,324 4.70% $1,113 0.00% $1,199 3.70% $1,490 2.90%
San Diego-Carlsbad, CA $2,793 3.10% $2,285 6.40% $2,531 2.30% $3,076 0.90%
San Francisco-Oakland-Hayward, CA $3,031 5.80% $2,488 8.90% $2,767 3.50% $3,450 4.50%
San Jose-Sunnyvale-Santa Clara, CA $3,268 9.60% $2,582 9.00% $2,943 8.50% $3,620 9.10%
Seattle-Tacoma-Bellevue, WA $2,161 2.70% $1,841 6.60% $2,113 1.40% $2,511 4.00%
St. Louis, MO-IL $1,220 3.80% $947 4.10% $1,141 3.80% $1,283 1.40%
Tampa-St. Petersburg-Clearwater, FL $1,784 -2.50% $1,476 -2.80% $1,650 -2.20% $1,968 -4.60%
Virginia Seaside-Norfolk-Newport Data, VA-NC $1,463 3.90% $1,386 19.50% $1,386 3.00% $1,480 -2.40%
Washington-Arlington-Alexandria, DC-VA-MD-WV $2,126 4.90% $1,771 5.10% $2,008 3.00% $2,454 4.60%

Methodology 

Rental knowledge as of October for items marketed as for-rent on Realtor.com®. Rental items contain house communities as smartly as non-public leases (condos, townhomes, single-family properties). All items had been studio, 1-bedroom, or 2-bedroom items. We employ communities that reliably file knowledge each and every month internal the tip 50 most engrossing metropolitan areas. National rents had been calculated by averaging the medians of the 50 most engrossing metropolitan areas. Realtor.com® began publishing recurring monthly condominium inclinations experiences in October 2020, with knowledge history stretching relief to March 2019.

With the release of its August 2022 rent file, Realtor.com® integrated a sleek and improved methodology for capturing and reporting more total condominium record inclinations and metrics. The sleek methodology is anticipated to yield a cleaner, more consultant, and more consistent measurement of condominium listings and inclinations at both the nationwide and native phases. The methodology has been adjusted to greater signify the shiny label of necessary housing for renters. Most areas all the arrangement in which by the nation will gape minor adjustments with a smaller handful of areas seeing bigger updates. As a outcomes of these adjustments, the condominium knowledge launched since September 2022 could well well no longer be directly linked with outdated releases (files downloaded sooner than September 2022) and Realtor.com® economics weblog posts. On the different hand, future knowledge releases, along with historical knowledge, will consistently practice the sleek methodology.

The Avail, by Realtor.com®, 2022 Tumble Landlord and Renter Examine serene responses from a nationally consultant sample of bigger than 2,700 unbiased landlords and renters. The gape was conducted between November 1st, 2022, and November Ninth, 2022. The margin of error for unbiased landlords is ± 3.1%, and ± 2.4% for renters. Avail, by Realtor.com®, repeatedly conducts condominium market research to model the wants of unbiased landlords and their renters. Focus on over with the Avail Housing Examine online page and be a a part of the particular experiences mailing checklist to no longer sleep-to-date on data, inclinations, and insights into the unbiased condominium market. 

Indicate:  Authorship credit rating to Jiayi Xu and Kaycee Jackson

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