June is usually a busy time for rental moves, but this June is showing a bit of a surprise as June demand typically leads to a rise in rent prices.
Usually prices rise in tandem with this increased demand. But not this June. Zumper reports, “Prices are softening across much of the country—an unexpected development given the seasonal trends we outlined in last month’s report.”
“This deceleration is, generally, good news for renters, but it does come with caveats,” Zumper CEO Anthemos Georgiades said in a release.
“Many cities are still stabilizing after long periods of sharp increases during the pandemic’s Great Migration, and though rents are softening they’re still at record highs in many markets.”
- At $1,504, Zumper’s National Index for one-bedrooms is flat over last month. The two-bedroom median is $1,891, an increase of just 0.3 percent. At 5.8 percent, the year-over-year increase in national one-bedroom rent is the smallest gain in nearly two years.
- Yet, renters in cities like New York and Jersey City are facing historic highs that show no sign of slowing down.
- San Diego’s median one-bedroom rent of $2,440 puts it slightly ahead of Los Angeles; prices in those two cities have been in close competition since early 2021.
“Of our top 100 cities, 46 are down over last month, 12 are flat and 42 are up month-over-month,” Zumper says in the release.
Here is some of what is going on:
- Record numbers of new rentals are coming online in many markets.
- In May, construction starts of multifamily units reachedthe highest rate since 1986.
- However, high interest rates and a risk-averse investment climate may soften that building boom.
- Billing at architecture firms specializing in multifamily projects is at its lowest level in two years.