Landlords are continuing to ask near record-high rents amid a tight housing market, but tenants in some parts of the country are still finding deals, according to a new study from Redfin.
The asking rent in August was $2,052, up slightly (0.7%) from just a month earlier when the asking rent was $2,038.
To compensate for rent that is too high for many, some landlords are offering concessions and one-time discounts. “A year ago, you really didn't see concessions in the market. Fast forward to today, and they are far more common, with landlords offering from one to three months free in an effort to attract new tenants without lowering their asking rents,” said John Ziglar, Chief Executive Officer at Rent, a Redfin company.
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Then again, some building owners are raising rents for existing tenants but not new tenants to help bolster returns without frightening off prospective renters.
Although rents are hovering near record highs, they no longer post large year-over-year jumps like in the past two years. For instance, In August 2022, the median asking rent was up 12.3% year-over-year, reflecting a resurgence in rental activity after the 2020-2021 slowdown.
However, rent growth has cooled over the past year, due to high inflation, rising interest rates and an increase in the supply of rental property, among other factors. A shortage of housing may also be a factor, as well as an increase in the cost of homeownership, especially with mortgage expenses nearly doubling since January.
Rents rise in the Midwest and Northeast, fall in the West
Asking rents surged 4.6% year over year to a record $1,434 in the Midwest. Rents rose 1.2% to $2,509 in the Northeast. By comparison, the median asking rent in the West fell 1.1% year over year to $2,469 in August, and in the South, rents fell 0.3% to $1,673, the first decline since 2020.
While rents remain somewhat sluggish in the West and South, these markets have begun to stabilize as layoffs ease and the impact of the pandemic fades.
It’s worth noting that the prices reflect the current costs of new leases during each time period. That means the amount shown as the median rent is not the median of what all renters are paying but the median asking price of apartments available for new renters during the report month.
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