June saw another month of rent increases as the national median rent ticked up by 0.4 percent in June, increasing for the fifth consecutive month, according to the July report from Apartment List.
“We are now in the middle of the peak summer moving season, and as such, we’ll likely see prices continue to increase for another month or two, before the fall cooldown begins.
“This trend is in line with typical seasonal patterns – prices generally increase in the spring and summer when most moves take place, and then soften in the fall and winter as moving activity slows,” the Apartment List research team writes in the report.
Highlights of the report:
- The national median rent increased in June, and now stands at $1,385.
- Rent prices nationally are down 1.2% compared to one year ago. Year-over-year rent growth has now ticked up for two straight months, after bottoming out in April at the lowest level that we’ve seen in our estimates going back to 2017. The national median rent has now fallen from its 2022 peak by a total of 4%.
- The national multifamily vacancy rate currently stands at 7.2%; after hitting a new record in February, the vacancy rate is now decreasing for the first time in over four years.
- Units are taking an average of 30 days to get leased after being listed, which is down from 31 days last month, but still three days longer than at this time last year.
Multifamily vacancy ticks down to 7.2%, first decline since 2021
The vacancy rate has been slowly creeping down, and now sits at 7.2 percent. “This marks the first time that we have seen a decline in our national vacancy index since late 2021. After bottoming out amid the pandemic era housing frenzy, the vacancy rate gradually loosened from record lows to record highs, but it appears to have finally hit its peak.
“That said, the recent decline has been modest, and the vacancy rate remains elevated above its long-run average. And with mixed news on the labor market combined with renewed inflation concerns, question marks around housing demand remain in play. Assuming that the vacancy continues to tighten, the change is likely to be slow and gradual,” the report says.
List-to-Lease time remains elevated at 30 days
Despite the month-over-month decline, list-to-lease time remains somewhat elevated. his lengthened list-to-lease time is a reminder that despite the recent inflection points in pricing and occupancy, rental market conditions remain decidedly cool.
Conclusion
“We are seeing signs that the tide may be turning on the soft conditions that have defined the market over the past three-plus years. However, multifamily conditions remain notably cool overall, and an uncertain macroeconomic outlook presents risks to rental demand. The coming months will provide more clarity on whether the market is simply plateauing or truly turning the corner to meaningfully tighter conditions,” the report says.
