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