The seasonal slowdown in rents continued in October as the nationwide median rent fell 0.7 percent to $1,354 marking the third consecutive month of negative rent growth and “declines are likely to persist in the coming months as we head into the winter,” Apartment List says in their November report.
On average this means apartments across the country are cheaper now than they were a year ago.
But despite the cool down recently, “the national median rent is still nearly $250 per month more expensive than it was just three years ago,” the report says.
Regionally, rents fell in October in 81 of the nation’s 100 largest cities, and prices are down year-over-year in 66 of these 100 cities.
Rents are down 0.7% month-over-month, down 1.2% year-over-year
Rent growth follows a seasonal pattern – rent increases generally take place during the spring and summer, whereas the fall and winter usually see a modest price dip.
This year, the slow season started a month earlier than usual, with a slight 0.1 percent decline in rents in August. Those monthly declines have gotten progressively steeper in the months since, with rents nationally falling by 0.5 percent in September and 0.7 percent in October, the report says.
Portland rent growth among slowest in the nation
The Portland and San Francisco metro areas are also experiencing some of the nation’s slowest year-over-year growth, showing that high-cost coastal metros are also seeing a slowdown in rental demand. These markets were among those that saw rapid declines in 2020, and are seeing it again now but more slowly. The Portland metro in particular ranks in the top 10 for slowest rent growth over the past 6, 12, and 36 months.
Apartment vacancies are back above pre-pandemic levels
The vacancy index stands at 6.4 percent, representing a return to pre-pandemic levels.
“This easing has plateaued in recent months, but we don’t expect it to tighten again anytime soon. Despite a recent slowdown in new building permits being issued, the number of multifamily units under construction remains near record levels,” Apartment List researchers write.
As developers work through this robust construction pipeline, the supply of new apartment inventory should remain strong in the year ahead. This means that renters should have more available options than they have in some time, especially in the Sun Belt markets where construction activity has been strongest.
However, vacancy trends are highly localized, and they have been a key indicator of rapidly evolving conditions in local markets across the U.S.