Rental Market Begins To Pull Out Of Slow Season

National rent prices ticked up 0.6% in March, the second consecutive monthly increase following six straight months of rent declines, as the rental market begins to pull out of the slow season, Apartment List says in the April report.

The nationwide median rent is now $1,388, more than $200 per month higher than it was just a few years ago.

Rental market begins to pull out of slow season as rent prices ticked up 0.6% in March, the second consecutive monthly increase

“This turnaround is in line with the rental market’s typical seasonal pattern, as we transition into the time of year when moving activity starts to gradually pick back up after bottoming out around the holidays,” Apartment List economists write in the report.

Rental market begins to pull out of slow season as rent prices ticked up 0.6% in March, the second consecutive monthly increase

New Apartment Completions Will Lead To More Vacancies

Looking at the supply side of new apartments coming on line, the Apartment List national vacancy index continues trending up and stands now at 6.7%.

“After a historic tightening in 2021, multifamily occupancy has been slowly but consistently easing for over two years. And with this year expected to bring the most new apartment completions in decades, we expect that there will continue to be an abundance of vacant units on the market in the year ahead,” Apartment List says in the report.

Rental market begins to pull out of slow season as rent prices ticked up 0.6% in March, the second consecutive monthly increase

Rent Growth Follows A Seasonal Pattern

Rent growth typically follows a seasonal pattern with rent price increases in the spring and early summer showing the rental market begins to pull out of the slow season this time of year.

“We are currently transitioning into the busy season, with the national median rent increasing for the second straight month, following six consecutive monthly declines from August 2023 to January 2024. The pace of that positive rent growth is also accelerating, with rents up 0.6 percent month-over-month in March, after increasing by 0.2% in February,” the report says.

“Shelter” Inflation Continues To Decline

The rental market slowdown is gradually showing up in the overall inflation numbers as the “shelter” component of the Consumer Price Index (CPI) continues downward.

The report acknowledges that the components of inflation are hard to predict but “the shelter component of CPI finally turned the corner last spring and has been steadily cooling off ever since. As the official measure of shelter inflation continues to trend down, it will help ease overall inflation as well,” the report says.

Summary

Rents were up in March in 81 of the 100 top cities Apartment List reports on.

“Historical seasonal patterns suggest that rents will continue trending up for the coming months, but we still expect rent increases to be moderated by a robust construction pipeline delivering new units throughout the remainder of 2024,” Apartment List economists write.

Read the full report here.

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