While rents fell across all unit sizes in June, especially large declines were seen in the South, according to the Realtor.com Rental Report. Marking the 11th straight month of declines, median asking rents for zero to two-bedroom units fell to $1,743 or -0.4% ($7) from June 2023.
The median rent for studios fell by -1.2% on a year-over-year basis, to $1,463, which is -2% lower than its October 2022 peak but 17.6% higher than five years ago. Median rent for one-bedroom units fell -1.1% to $1,618, for the 13th consecutive month of year-over-year declines, which is still 19.5% higher than it was five years ago. The median rent for two-bedroom units fell by -0.3% to $1,939 for the 12th consecutive month of annual declines. Larger units had the highest growth rate over the past five years, rising by 23%.
Regional rent trends were mixed in June. The South's decreases were led by Austin, Texas (-9.5%); San Antonio (-8.2%); and Nashville, Tennessee (-8.1%). While in the Midwest, rents increased overall, with jumps seen in Indianapolis (+4.4%), Milwaukee (+3.7%), and Minneapolis (+3.7%). Large metros in the West saw year-over-year rents decline, including Los Angeles (-1.9%) and San Francisco (-4.2%). In the Northeast, New York (+0.6%) saw rental rates edge up.
"Rents have been steadily falling for almost a year, though the pace of the decline has slowed," says Danielle Hale, chief economist at Realtor.com. "But rental costs have risen significantly since before the pandemic, and inflation has further strained renters' budgets, underscoring the need for more supply to meet demand and to keep renters from contributing an increasing percentage of their incomes to housing costs."
Compared with pre-pandemic levels in 2019, some markets have seen surges by as much as 40%, with Tampa, Florida, experiencing the largest increase over the past five years. The median asking rent for zero to two-bedroom units across the top 50 metro areas in June was 21.2% ($305) higher than the same month in 2019.
The top 10 markets with the fastest price growth versus pre-pandemic rents include Tampa-St. Petersburg-Clearwater, FL (+39.5%); Miami-Fort Lauderdale-Pompano Beach, FL (+39.2%); Indianapolis-Carmel-Anderson, IN (+37.5%); Pittsburgh (+37.4%); Sacramento-Roseville-Folsom, CA (+35.8%); Virginia Beach-Norfolk-Newport News, VA-NC (32.5%); New York-Newark-Jersey City, NY-NJ-PA (+31.3%); Cleveland-Elyria, OH (+30.6%); Raleigh-Cary, NC (+29.8%); and Birmingham-Hoover, AL (+29.3%).
In Tampa, the median asking rent in June was $1,752, or $496 higher than the pre-pandemic level, which is equivalent to about 8.6% of a typical Tampa household's monthly gross income, Realtor says. The biggest increase in the Midwest was in Indianapolis, up to $1,353. In the Northeast, Pittsburgh saw the largest percentage jump, with the median asking rent rising 37.4% to $1,484, and Sacramento led the West, with the median rent climbing by 35.8% to $2,007.
