After two years of consistent rent hikes pinching the pockets of new and existing renters, none of the nation’s top 40 largest markets saw year-over-year asking rents expand in August, signaling the start of a much-anticipated cooldown in an overheated rental market, Forbes reports. The rental sector posted negative monthly asking rent growth from July to August, with rents down 0.1% in July, and some popular destinations saw far more substantial declines midway through the summer.
By the end of August, rental prices in Palm Beach fell from 30.6% in the fourth quarter of 2021 to 8.2% a year later, and in Phoenix, rents are down year-over-year to 5.2% in August compared to 21% just eight months ago.
“After a 20-month run of positive monthly growth dating back to December 2020, the market finally witnessed negative asking rent growth on a monthly sequential basis from July to August, with rents down 0.1% in July,” said Jay Lybik, national director of multifamily analytics for CoStar Group. “We’re seeing a complete reversal of market conditions in just 12 months, going from demand significantly outstripping available units to now new deliveries outpacing lackluster demand.”
Advertisement
Related Stories
Build to Rent
Single-Family Rent Growth Remains Elevated, Despite Dip in Multifamily Rental Rates
Multifamily rent growth, specifically, is decelerating since its year-over-year peak of +16.3% in 2022, but in many markets, single-family rents are continuing to rise
Affordability
How Much Must American Renters Earn to Afford Average Rental Prices?
US rents have increased 3.6% year-over-year, pushing the amount renters must earn to afford average rents to around $80K
Build to Rent
Build-to-Rent Is Booming, Particularly in These Metros
A recent report finds that the Phoenix metro leads with more than 4,000 build-to-rent units completed in 2023, and Texas is the leading state for build-to-rent development