Zumper’s November rent report shows that pandemic-era trends are starting to unwind, especially in areas that saw strong in-migration. And with fear of a looming recession and diminishing occupancy, rental prices are starting to inch down gradually across much of the nation.
The median price of a one-bedroom is flat compared with the prior month, while the two-bedroom median fell 0.4%. According to Zumper, the two-bedroom median is down or flat in 60% of the top 100 cities it covers.
In addition, several metros that have experienced sustained rent increases are starting to level off. For instance, median one-bedroom rent is down 2.9% in Nashville, Tennessee, 2% in Boston, and 1.8% in New York City. In Tulsa, Oklahoma, where an incentive program luring remote workers contributed to big rent hikes, the one-bedroom median rent has decreased 6.3% over the prior month. Fresno, California, also saw rents down 6.3%, falling 16 spots this month to the bottom half of the list with a median one-bedroom rent of $1,330.
“We’re seeing pandemic trends begin to unwind, and unwind quickly, as renters hunker down in anticipation of a recession,” said Zumper CEO Anthemos Georgiades. “With inflation and interest rates high and the labor market beginning to tighten, Americans are holding off on major economic decisions. Household formation has paused and even inverted, driving demand down and cooling off rent prices.”
The November report singled out Arizona as the perfect example of the unwinding pandemic-era migration trends. Most cities in the state saw skyrocketing rent increases during the pandemic, thanks to an influx of residents looking for a better quality of life and warmer weather. According to Zumper, in April 2020, the median one-bedroom rent across the state was $993. Two years later, it had jumped 33.5% to $1,326.
With economic uncertainty, high inflation and interest rates, and return-to-work policies, demand has started to soften. In Phoenix, one-bedroom median rent is up nearly 19% year over year, but the hikes are starting to slow. The one-bedroom median rent in Phoenix is up just 0.7% month over month, while the two-bedroom median rent is down 0.6%. In addition, Chandler, Gilbert, and Tucson also saw one-bedroom median rents decrease this month, with the trend expected to spread to Phoenix suburbs like Mesa and Scottsdale within the next six months.
The report also cited New York City as the most expensive city for renters, even with the 1.8% drop in one-bedroom median rent from October. “With seemingly never-ending demand and limited supply, we don’t anticipate New York relinquishing its title of most expensive in the foreseeable future,” noted the report. “Surrounding metro areas—likely absorbing renters priced out of New York—are also seeing increased demand. The one-bedroom median in Newark, New Jersey, for example, is up 4.5% over last month.”
Boston and San Francisco are tied at second for the most expensive cities for renters, followed by Miami and San Jose, California.