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While rents are still rising in some U.S. cities, others are already showing signs of a market slowdown.
Redfin data showed that rents still rose for the entire month of January, but prices rose only 2%, the smallest increase in 20 months. Rent growth is up 2.4%, which is significantly lower than the peak of 17.5% in March 2022.
The rental market may be slowing due to falling demand and increasing supply, suggesting prices may continue to fall in the coming months.
“We are closely monitoring whether rents start to decline year-over-year, as this has not happened since the pandemic began,” Darryl Fairweather, Redfin's chief economist, said in a report. “This will be a welcome relief for renters.” “If rents start to fall year-on-year, it means renters have more room to negotiate. It could also mean more landlords are selling their properties because they are no longer getting enough return on their investment. ”
However, the rental market is not the same everywhere, and while some metropolitan areas have seen significant price declines, other regions are still seeing rental growth hit new heights. Phoenix, Arizona had the biggest drop in rent growth, with a 6.7% drop. Raleigh, North Carolina, had the largest increase with a 22.5% increase in rental prices.
Related article: Rent prices may finally be cooling down — but not in these cities
Metropolitan areas with the largest rent declines
- Phoenix, Arizona (-6.7%)
- Oklahoma City, Oklahoma (-6.3%)
- New Orleans, Louisiana (-5.2%)
- Minneapolis, MN (-5.1%)
- Houston, Texas (-4.9%)
- Baltimore, Maryland (-4.6%)
- Birmingham, Alabama (-3.4%)
- Chicago, IL (-3.0%)
- Virginia Beach, VA (-1.8%)
- Seattle, Washington (-1.0%)
- Austin, Texas (-0.4%)
Metropolitan areas with the largest rent increases:
- Raleigh, North Carolina (22.5%)
- Cleveland, Ohio (17.5%)
- Indianapolis, Indiana (14.9%)
- Charlotte, North Carolina (14.2%)
- Nashville, Tennessee (9.8%)
- Kansas City, Missouri (8.8%)
- Louisville, Kentucky (8.2%)
- Milwaukee, WI (7.7%)
- Jacksonville, Florida (7.5%)
- Providence RI (7.3%)
RELATED: This is the most expensive rental zip code in the U.S. – and it's not New York or San Francisco
