Austin, Texas (-4.7%), Memphis, Tenn. (-4.4%), St. Louis (-4.0%), Atlanta (-3.7%), Miami (-3.6%), and Phoenix (-3.2%) lead the nation with the largest rent drops  

Rents declined in March for the eighth consecutive month, with year-over-year prices dropping by -0.3% and declines seen across all unit sizes, according to the Realtor.com^® Rental Report released today. Even so, the median rent of $1,722 was only $36 less than the peak seen in August 2022 and was $313 more than in March 2019, before the pandemic, pointing to a resilient rental market.

Top 10 markets with the largest yearly rent price declines include: Austin-Round Rock, Texas (-4.70%); Memphis, Tenn.-Ms.-Ark.(-4.40%); St. Louis, Mo.-Ill. (-4.00%); Atlanta-Sandy Springs-Roswell, Ga (-3.70%); Miami-Fort Lauderdale-West Palm Beach, Fla. (-3.60%); Phoenix-Mesa-Scottsdale, Ariz. (-3.20%); Nashville-Davidson–Murfreesboro–Franklin, Tenn. (-2.90%); Orlando-Kissimmee-Sanford, Fla (-2.80%); Tampa-St. Petersburg-Clearwater, Fla. (-2.50%); and Cleveland-Elyria, Oho (-2.50%).

“Rising shelter costs have been a major driver of overall inflation, a top concern for the Fed as it meets this week,” said Danielle Hale, Chief Economist at Realtor.com^®. “There is some good news for renters with prices falling in many parts of the country, especially outside expensive metro markets in the West and Northeast. However, we expect cost pressures to continue as interest rates remain high and would-be buyers opt to rent instead and keep demand high. New housing construction is needed, especially in major markets in the Northeast and West, to alleviate the home supply shortage. Softer rents in the South are evidence that more supply helps tame rising costs.”

Rents in Midwest held steady amid rising unemployment, declined in the South 

March rents in the Midwest were flat, though there was strong growth in Chicago (4.3%), Kansas City, Mo. (3.4%), and Indianapolis (3.3%). Midwest markets have remained more affordable, with median rent in Chicago ($1,846), for example, more than $1,000 less than in New York and Los Angeles. Still with unemployment rising in the Midwest, rental prices could slow or decline there. In the South, meanwhile, the median asking rent fell by -1.5% from a year ago. The biggest drops occurred in Austin, Texas (-4.7%), Memphis, Tenn. (-4.4%), Atlanta (-3.7%), Miami (-3.6%) and Nashville, Tenn. (-2.9%). Unemployment is low and demand for rental housing was strong, but an influx of new units has helped push down rental prices.

Rents in the West saw new growth, while expensive Northeast markets continue to climb

The median asking rent in the West rose by 0.4% from a year ago, the first annual increase after 13 months of declines. Increases came in expensive metro areas such as San Diego (2.9%) and Los Angeles (1.6%), as more potential first-time buyers opted for renting in the face of high home prices and the expectation that mortgage rates will remain elevated in the near future. Unemployment rates in the West rose, potentially forcing some people to postpone buying plans and pushing up rental rates – although if labor market conditions deteriorate, more people may leave the area entirely. Some Western metros saw declines in rent, including Phoenix (-3.2%) and Denver (-1.9%). Expensive Northeastern metros continued to see an even faster pace of rent growth, with median rents in New York rising by 3.8% and in Boston by 3.3%. Labor markets in the region remain relatively robust, and demand for rental housing is outstripping supply.

Amid general drop in rents, studios saw biggest decline 

In March, units of all sizes saw median rent declines, with studios showing the largest drop (-1.4%) on a year-over-year basis, to $1,435. It was the seventh consecutive month of rent declines for studios, though the median asking rent is still 17.6% higher than five years ago. Median asking rents for one-bedroom units declined by -0.1%, to $1,602. That relatively small drop may be because one-bedroom units are an alternative to both smaller and larger units. Meanwhile, rents for two-bedroom units declined by -0.5% to $1,908, the eighth consecutive month of year-over-year decline. These units still had the highest growth rate over the past five years, up by $372 (24.2%).

National Rental Data – March 2024

Top 10 metros with the largest year-over-year declines, March 2024

Rental Data – 50 Largest Metropolitan Areas – March 2024

The number of homes for sale in Cape Coral, FL and North Port, FL surged roughly 50% from a year earlier in March—more than anywhere else in the country. And in McAllen, TX, supply jumped 25%.

On the west coast of Florida, housing supply is surging, sellers are cutting their asking prices and the time it takes to sell a home is soaring—all at a faster rate than anywhere else in the U.S. The story is similar in parts of Texas. That is according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

Here’s how these trends showed up in U.S. housing-market data for March, which covers 85 major metropolitan areas:

• SUPPLY: Of the 10 metro areas that posted the largest year-over-year increases in supply, six are in Florida and two are in Texas. Cape Coral, FL saw the biggest jump in homes for sale (51%), followed by North Port-Sarasota, FL (48%), Fort Lauderdale, FL (30%), Tampa, FL (29%), McAllen, TX (25%), Orlando, FL (23%), Knoxville, TN (23%), Dallas (20%), West Palm Beach, FL (20%) and Cincinnati (17%).
• PRICE DROPS: Of the 10 metro areas where sellers were most likely to cut their list prices, five are in Florida and two are in Texas. In North Port-Sarasota, 48% of listings had a price cut—the highest share in the country. Next came Tampa (44%), Indianapolis (43%), Cape Coral (41%), Denver (37%), Orlando (35%), Portland, OR (34%), Houston (33%), San Antonio (33%) and Jacksonville, FL (33%).
• PRICES: Median sale prices fell from a year earlier in three metros, one of which is in Florida and one of which is in Texas: North Port-Sarasota (-4.6%), Oklahoma City (-1.5%) and San Antonio (-0.3%). Prices climbed least in Austin, TX (0%), El Paso, TX (0.5%), Memphis, TN (0.7%), Tampa (1.1%), Salt Lake City (1.1%), Omaha, NE (1.2%) and Charleston, SC (1.2%).
• SPEED OF SALES: Of the 10 metros that saw the biggest upticks in median days on market, two are in Florida and two are in Texas: In Cape Coral, the typical home took 31 more days to sell than a year earlier—the largest jump in the nation. Next came North Port-Sarasota (20), McAllen (20), New Orleans (18), Tulsa, OK (13), Cincinnati (13), San Antonio (10), Greensboro, NC (8), Honolulu (7) and Knoxville (7).

Florida and Texas have been building more homes than anywhere else in the country, partly to accommodate the flood of newcomers that showed up during the pandemic homebuying boom. But the boom is over, in part because many people have been priced out. Now, homes are sitting on the market and price growth is stagnating.

“Out-of-town homebuyers no longer see Florida as a place to get amazing value. Now they’re moving to North Carolina or Tennessee to get a good deal. Many local blue-collar workers have been priced out of homeownership, too,” said Eric Auciello, a local Redfin sales manager. “Two years ago, the North Port metro was one of the most competitive housing markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of those things are true today. Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost. The Tampa metro has been faring a bit better.”

Individual home sellers are having a tough time attracting buyers in part because builders are offering concessions that are hard for buyers to refuse. As a result, listings from regular sellers are sitting on the market. But homes are also sitting because many sellers are pricing their properties too high, and then being forced to cut later, Auciello said.

“The sharp ascent in Florida housing prices in recent years has driven a lot of homeowners to cash in on their equity, but some of them are having a hard time adjusting to the fact that it’s a buyer’s market,” Auciello said. “My advice to sellers is to price your home fairly; the comps from six months ago don’t exist now. And if you’re a buyer, know that the odds of getting an offer accepted below market value are pretty high.”

The insurance crisis in Florida is also throwing a wrench into home purchases and in some cases delaying deals. Nearly three-quarters of Florida homeowners say they or the area they live in has been affected by rising home insurance costs or changes in coverage, a recent Redfin survey found.

“One of our agents is representing a buyer who thought he’d be able to get insurance for $2,000 per year—the rate the existing homeowner has. But he found out at the eleventh hour that his insurance will be $4,000 because the house has had water damage. We’re seeing sellers offer a lot of concessions to hold deals together,” said Auciello, whose own home insurance is now $14,000 a year all in, up from around $8,000 two years ago. “We’re at an inflection point. A hefty insurance bill isn’t always a big deal for a luxury buyer, but it can be a really big issue for someone buying a waterfront home on a smaller budget.”

Connie Durnal, a Redfin Premier real estate agent in Dallas, said her market has also been sluggish.

“Last year was by far the slowest market I’ve seen in my 20 years as a real estate agent,” Durnal said. “Move-up buyers are almost nonexistent. Even though a lot of homeowners have built up a ton of equity, many don’t want to sell because their monthly payment would double or triple due to high mortgage rates.”

Nationwide, New Listings Slowed in March and Prices Rose From a Year Earlier

New listings dropped 6% month over month in March—the largest decline on a seasonally adjusted basis since January 2022. They rose 6% from a year earlier, but that marks a deceleration from the 14% annual gain in February.

New listings may have slowed because mortgage rates are staying higher longer than expected, which is exacerbating the lock-in effect. The average 30-year-fixed mortgage rate in March was 6.82%—the highest since December—and the Federal Reserve has warned that elevated inflation will probably delay the interest-rate cuts they had been planning this year.

Prices continued to rise, in part because there’s still a shortage of homes for sale. The median U.S. home sale price rose 5% year over year in March to $420,357, just 3% below the record high of $432,496 set in May 2022.

Home sales were roughly flat compared with a month earlier on a seasonally adjusted basis, and were down 3% from a year earlier.

March 2024 Highlights: United States

To view the full report, including charts and additional metro-level data, please visit:

https://www.redfin.com/news/housing-market-tracker-march-2024