Rental prices in the United States have dropped for five straight months, according to data from the National Association of Realtors®. Average rents in the 50 largest metros dropped to $1,747 in the month of September. This is the first time that rental prices have declined for five consecutive months since 2010. An uptick in construction rates of multi-family homes helped to push down rents. We discuss some of the factors contributing to this below.
Driving forces for lower rental prices
- Rising supply: A record number of new rental units are coming onto the market in 2023. This is increasing competition among landlords and driving down prices.
- Cooling demand: Demand for rental housing is cooling off as some renters are choosing to buy homes or move in with family or friends. This is also contributing to the decline in rental prices.
- Economic uncertainty: The U.S. economy is facing a number of challenges, including rising inflation and interest rates. This is making some renters more cautious about spending money, and it is also leading some landlords to lower rents in order to attract tenants.
What does this mean for renters?
If you are a renter, the decline in rental prices is good news for you. You may be able to negotiate a lower rent with your landlord, or you may be able to find a new apartment at a lower price. However, it is important to be prepared to act quickly, as apartments are still renting quickly in many markets.
What does this mean for landlords?
If you are a landlord, the decline in rental prices may mean that you need to be more flexible on rent and terms. You may also need to be prepared to market your property for a longer period of time. However, it is important to keep in mind that the long-term outlook for the rental market is still positive. The demand for rental housing is expected to continue to grow in the coming years.
The rental market is constantly changing, so it is important to stay informed about the latest trends and developments. In addition, every market is different and even the time of the year can make a huge difference. For example, here in South Florida, oceanfront condo rental demand in the winter months is substantially higher than during the summer months. Since many of these rentals are for seasonal terms, these rental prices also tend to be significantly higher.
Overall, the South Florida rental market continues to remain strong given the number of Americans opting to relocate to our area. With this said, current economic challenges are resulting in a relative softening of the market.
As always, it is best to consult with a local and knowledgeable real estate agent for your market. Are you in South Florida? We can help! Contact Natasha at Live South Florida Realty, Inc. today. Also, be sure to download the free Florida Home Search app for your mobile device.