The average share of rental listings on Realtor.com offering rental concessions from waived application fees to rent credits and rent-free months reached 43.5% across the 50 largest U.S. metros, up from 40.4% a year ago, according to the Realtor.com monthly rent report.
At the same time, the median asking rent registered at $1,699, having dropped $65 from its summer 2022 peak.
“Combined with softening median asking rents and a growing concession rate, this suggests renters have more negotiating power and more options to find favorable deals in today’s market,” says Realtor.com senior economist Jiayi Xu.
Five metros, all located in the well-supplied West and South, stood out from the crowd for offering the nation’s highest concession rates topping 65%.
Denver took top position with a concession rate of 71.9%, meaning that nearly 3 out of 4 for-rent listings came with concessions. Austin, TX, was a close second with 70.7%, followed by Las Vegas (69.6%), Nashville, TN (69%), and San Antonio, TX (67.9%).
High vacancy rates are fueling the surge in concessions in those metros. Simply put, landlords would rather offer a discount today than absorb a long-term loss from an unoccupied unit.
The driving force behind this glut of empty units? A construction-fueled inventory boom in oversupplied markets that have become victims of their own building sprees, forcing owners to offer perks just to stay competitive.
“There are a lot of apartment communities in Denver with a lot of similar amenities, and more are coming,” Katie Caldwell, a broker associate at Serhant in Colorado, tells Realtor.com. “There are a lot of options for renters to choose from within that particular lock & leave pool.”
In Nashville, Brittany Cyr, broker and property manager at Prime Rentals & Real Estate, says rental inventory has been stockpiling over the past couple of years.
“Driven mainly by all the newly constructed apartments, as well as single-family homes that are not selling easily in this sales market, rental supply is extremely high right now,” Cyr tells Realtor.com.
According to the broker, many property owners have become “accidental landlords” after failing to sell their homes for the price they wanted and deciding to rent them out instead until sales market conditions improve.
“It’s a perfect storm of sky-high inventory,” adds Cyr. “While we do start to see a seasonal slowdown this time of year, that is not what’s driving the concessions currently.”
