National rents fell 0.1% in August signaling the end of the rental market’s typical busy season, according to the September report from Apartment List.
The median national rent is now $1,412. In August, 59 of the nation’s 100 largest cities saw rents fall.
This is the second consecutive summer of modest rent growth, “as the market remains sluggish thanks to a windfall of new supply. If historical trends hold, rents will continue to fall on a monthly basis for the remainder of the year,” the Apartment List research team writes in the report.
In the fall, fewer households tend to move when school resumes and temperatures cool.
The report says that apartments are on average slightly cheaper today than they were one year ago.
Year-over-year rent growth is -0.7 percent and “has now been in negative territory for over a full year. Despite this, the national median rent is still more than $200 per month higher than it was just a few years ago,” the report says.
Vacancy Index continues elevated
Through August the Apartment List vacancy index sits at 6.7 percent, the highest reading since August 2020.
“And there’s good reason to expect that it could rise even further during the remainder of the year,” the report says. “This means that renters should have more available options than they have had in some time, especially in the Sun Belt markets where construction activity has been strongest.”
Report Summary
The report concludes that with August’s 0.1% decrease, the busy season is officially over and rents will continue to fall for the remainder of the year.
“Year-over-year rent growth also indicates a sluggish market, remaining negative at -0.7 percent. Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.
“Improving consumer sentiment about broader macroeconomic conditions seems to have driven a rebound in rental demand this year, but that bounce back has so far been outweighed by the impact of incoming supply. And recent signals of labor market softness could dampen demand going forward,” says the Apartment List research team in the report.
See the full September report here.
