Respite on the Horizon: US Rent Prices Show Signs of Easing

Wednesday, June 28, 2023   /   by Fahad Karamat

Respite on the Horizon: US Rent Prices Show Signs of Easing

Renters across the US, rejoice! Recent data from Realtor.com reveals a downward trend in median rent prices in May, breaking the persistent upward trajectory we've witnessed in the past years.


A Historical Dip


May's national median asking rent stood at $1,739, representing a slight monthly increase from April but, more importantly, a 0.5% dip from the previous year's May. This decline is noteworthy, marking the first of its kind since 2020, when Realtor.com started closely monitoring these trends.


Economist's Take


Danielle Hale, the Chief Economist at Realtor.com, perceives this decline as an early sign of fading rental-driven inflation. Hale optimistically points out that the blend of declining rents, easing inflation, and a robust job market spells a positive outlook for American households.


Rental Peaks and Troughs


The pandemic brought about unexpected turns in rental pricing. With "pandemic pricing" dominating 2020, rent soared in 2021 and early 2022 due to the mass return to urban environments. Despite the recent decline, the current rent values remain a considerable 25% above those of 2019.


Geographical Variations


Rent prices, though showing an overall trend, differ across regions. The West and South saw rent decreases in May, whereas the Midwest and Northeast observed a spike. Specific cities like Columbus and St. Louis experienced pronounced hikes, while places like Las Vegas and Phoenix registered notable declines.


Looking Forward


Danielle Hale anticipates the softening rent trend to continue the following year, bolstered by the expected increase in housing supply from multifamily construction. Nonetheless, renters might need to exercise patience before witnessing this trend's effects on national inflation metrics like the Consumer Price Index (CPI).


After enduring tumultuous climbs, the rental market is hinting at a plateau. This shift brings respite to renters, who now have a moment to catch their breath after navigating the mazes of a relentless market. It's a dawn of potential stabilization in the ever-evolving rental landscape.


  real estate, news, forecast, rent

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