Published: may. 18, 2023 at 6:00 AM EDT
Record-high construction of multi-family homes helps to ease housing shortages
SANTA CLARA, Calif., May 18, 2023 /PRNewswire/ — The Realtor.com® April Rental Report found that the US rental market experienced single-digit growth for the ninth month in a row after 15 months of slowing. Median rent across the top 50 metros was up just 0.3% year-over-year, the lowest growth rate since the onset of the pandemic. The median asking rent was $1,734up by $4 from last month, but down by $43 from the peak.
“In April, we continued to see rising rent prices and a moderating growth rate. This is promising news for renters, suggesting that the pandemic peaks are behind us, and that the challenging affordability picture may begin to improve,” said Realtor.com® Chief Economist Danielle Hale. “We’ve seen a record-high new construction occurring in the multi-family space, which is creating more units, helping to reduce competition and in turn helping to ease prices.”
Affordability improves, but prices are still high
One major factor contributing to lower rent prices is a significant increase in multi-family construction. This has helped the vacancy rate reach its highest level (6.4% in Q1 2023) in two years. As more new rental properties are added to the market, the vacancy rate could inch back toward the norms we saw in 2013-2019 (about 7.2%) and would improve affordability for renters. Despite more available rentals and slower rent growth, average rent still costs $348 (25.1%) more than it would have at this time in 2019.
Save money by staying put
Renters who renew their lease tend to pay less than those who sign a new lease. A 2022 survey from Avail, a Realtor.com® business, found that renters signing a new lease reported a price increase of nearly 27% – about double what people who have been in their rental for 1-2 years experienced (13%). To avoid paying this premium, renters are renewing leases at record-high levels, contributing to a stickier CPI Shelter Index.
“Realtor.com® monthly data is based on median asking rents rather than survey responses, which are used in the CPI Index, so CPI data lags behind what we’re seeing. The data suggest that easing in the cost of shelter is ahead in future CPI reports. While this could take until 2024 to play out significantly, it will be welcome news for renters and for overall inflation,” said Hale.
For more information on what landlords and renters are experiencing, read the latest Avail quarterly survey.
Rental Data – 50 Largest Metropolitan Areas – April 2023
|
Metro |
Median Rent 0-2 |
YOY 0-2 |
Rent Vacancy Rate |
Homeownership Rate |
|
Atlanta-Sandy Springs-Roswell, Ga. |
$1,672 |
-1.4 % |
9.8 % |
66.6 % |
|
Austin-Round Rock, Texas |
$1,730 |
-4.8 % |
7.3 % |
63.4 % |
|
Baltimore-Columbia-Towson, Md. |
$1,821 |
0.4 % |
12.8 % |
72.9 % |
|
Birmingham-Hoover, Ala. |
$1,233 |
3.6 % |
11.9 % |
67.0 % |
|
Boston-Cambridge-Newton, Mass. -NH. |
$2,842 |
4.2 % |
2.7 % |
61.1 % |
|
Buffalo-Cheektowaga-Niagara Falls, NY. |
$1,230 |
-1.1 % |
3.8 % |
72.0 % |
|
Charlotte-Concord-Gastonia, NC-SC. |
$1,557 |
-2.4 % |
4.5 % |
63.4 % |
|
Chicago-Naperville-Elgin, Ill. -Ind. -Wisc. |
$1,835 |
0.9 % |
4.7 % |
68.8 % |
|
Cincinnati, Ohio,-Ky.-Ind. |
$1,218 |
9.9 % |
5.9 % |
68.4 % |
|
Cleveland-Elyria, Ohio |
$1,144 |
-3.6 % |
2.5 % |
65.0 % |
|
Columbus, Ohio |
$1,270 |
8.4 % |
6.4 % |
59.3 % |
|
Dallas-Fort Worth-Arlington, Texas |
$1,538 |
-3.1 % |
10.8 % |
61.5 % |
|
Denver-Aurora-Lakewood, Colo. |
$1,957 |
-2.0 % |
4.1 % |
69.7 % |
|
Detroit-Warren-Dearborn, Mich. |
$1,390 |
8.9 % |
8.3 % |
73.0 % |
|
Hartford-West Hartford-East Hartford, Conn. |
$1,650 |
-2.1 % |
5.0 % |
67.3 % |
|
Houston-The Woodlands-Sugar Land, Texas |
$1,438 |
3.2 % |
12.3 % |
60.9 % |
|
Indianapolis-Carmel-Anderson, Ind. |
$1,336 |
8.1 % |
10.9 % |
69.2 % |
|
Jacksonville, Fla. |
$1,466 |
-0.4 % |
7.5 % |
72.9 % |
|
Kansas City, Mo. -Kan. |
$1,282 |
3.5 % |
8.7 % |
64.3 % |
|
Las Vegas-Henderson-Paradise, Nev. |
$1,509 |
-5.7 % |
5.5 % |
59.1 % |
|
Los Angeles-Long Beach-Anaheim, Calif. |
$2,875 |
-2.1 % |
3.5 % |
46.1 % |
|
Louisville/Jefferson County, Ky. -Ind. |
$1,218 |
6.0 % |
1.2 % |
65.9 % |
|
Memphis, Tenn. -Miss. -Ark. |
$1,341 |
-2.6 % |
5.3 % |
63.1 % |
|
Miami-Fort Lauderdale-West Palm Beach, Fla. |
$2,503 |
-0.3 % |
7.0 % |
55.5 % |
|
Milwaukee-Waukesha-West Allis, Wisc. |
$1,583 |
6.8 % |
3.7 % |
62.6 % |
|
Minneapolis-St. Paul-Bloomington, Minn. -Wisc. |
$1,515 |
1.8 % |
10.1 % |
67.6 % |
|
Nashville-Davidson–Murfreesboro–Franklin, Tenn. |
$1,599 |
-1.7 % |
9.9 % |
71.4 % |
|
New Orleans-Metairie, La. |
$1,270 |
-15.4 % |
9.6 % |
60.4 % |
|
New York-Newark-Jersey City, NY-NJ-Penn. |
$2,914 |
8.0 % |
4.1 % |
50.7 % |
|
Oklahoma City, Okla. |
$1,014 |
7.0 % |
9.4 % |
66.8 % |
|
Orlando-Kissimmee-Sanford, Fla. |
$1,810 |
0.9 % |
4.5 % |
65.5 % |
|
Philadelphia-Camden-Wilmington, Penn.-NJ-Del.-Md. |
$1,834 |
3.6 % |
4.5 % |
66.5 % |
|
Phoenix-Mesa-Scottsdale, Ariz. |
$1,646 |
-5.2 % |
5.2 % |
67.5 % |
|
Pittsburgh, Penn. |
$1,464 |
7.1 % |
6.8 % |
75.7 % |
|
Portland-Vancouver-Hillsboro, Ore. -Wash. |
$1,691 |
-0.1 % |
5.6 % |
66.1 % |
|
Providence-Warwick, RI-Mass. |
$1,872 |
1.8 % |
4.6 % |
67.8 % |
|
Raleigh, N.C. |
$1,535 |
-2.2 % |
10.9 % |
64.6 % |
|
Richmond, Va. |
$1,438 |
4.8 % |
8.6 % |
66.5 % |
|
Riverside-San Bernardino-Ontario, Calif. |
$2,123 |
-10.9 % |
4.9 % |
70.5 % |
|
Rochester, New York. |
$1,243 |
-3.6 % |
2.5 % |
63.9 % |
|
Sacramento–Roseville–Arden-Arcade, Calif. |
$1,871 |
-1.6 % |
4.6 % |
65.3 % |
|
San Antonio-New Braunfels, Texas |
$1,287 |
0.2 % |
8.2 % |
68.3 % |
|
San Diego-Carlsbad, Calif. |
$2,877 |
-1.0 % |
3.3 % |
52.5 % |
|
San Francisco-Oakland-Hayward, Calif. |
$2,829 |
-2.5 % |
4.7 % |
58.3 % |
|
San Jose-Sunnyvale-Santa Clara, Calif. |
$3,329 |
3.2 % |
5.9 % |
53.3 % |
|
Seattle-Tacoma-Bellevue, Wash. |
$2,117 |
-0.2 % |
3.3 % |
61.7 % |
|
St. Louis, Mo. -Ill. |
$1,333 |
5.7 % |
6.9 % |
68.8 % |
|
Tampa-St. Petersburg-Clearwater, Fla. |
$1,776 |
-4.1 % |
8.7 % |
61.1 % |
|
Virginia Beach-Norfolk-Newport News, Va.-NC. |
$1,464 |
1.8 % |
6.8 % |
68.9 % |
|
Washington-Arlington-Alexandria, DC-Va.-Md.-WV. |
$2,213 |
4.9 % |
5.5 % |
64.5 % |
Methodology
Rental data as of April for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
With the release of its April rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since April 2023 will not be directly comparable to previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
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®.
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