Asking rents for newly constructed apartments decreased to $1,746 in the second quarter, down 6.2% year over year, according to a new report from Redfin.
It also marked the second consecutive quarter that rents for newly constructed units posted a year-over-year decline. In the first quarter, rents fell 7.5%.
With historic levels of apartment supply being delivered—completions rose 18.7% year over year in the first quarter—asking rents are trailing off from their peak of $1,889 in the first quarter of 2022.
“Rents for new apartments will likely fall a little more this year because there are still a ton of new buildings being completed,” said Redfin senior economist Sheharyar Bokhari. “With new apartments popping up everywhere, owners are competing with one another to find tenants by reducing rents and offering concessions like free parking.”
He added that renters in markets that have seen booming construction, many in the Sun Belt, can find deals. For example, in Austin, Texas, overall rents for new and existing apartments decreased 17.6% year over year in August, according to Redfin’s Rental Tracker.
Asking rents for newly built one-bedroom apartments, the most common type of new apartments, saw the largest declines in the second quarter, falling 9% year over year to $1,566. Newly completed two-bedroom units also decreased 4.5% to $1,934, while newly completed apartments with three or more units fell 3% to $2,309.
Newly completed studios saw asking rents inch up slightly, 0.9%, to $1,617. According to Redfin, median asking rents for studios can be more volatile because fewer of these units are being built, and they are more likely to be in larger and more expensive markets.
