As Apartment Rent Growth Declines, Renters Gain the Upper Hand
New York, NY, June 13, 2023-"Apartment rent growth is declining fast, shifting the rental market to the tenant’s favor for the first time in years,” reports the Wall Street Journal.
“The average of six national rental-price measures from rental-listing and property data companies shows new-lease asking rents rose just under 2% over the 12 months ending in May.
“That is down from the double-digit increases of a year ago and represents the largest deceleration over any year in recent history, according to data firm CoStar Group and rental software company RealPage.
“An annual decline would offer relief for millions of renters who have had to contend with rents that rose 25% nationally over less than two years. With housing costs as the biggest component of the consumer-price index, a decline in rents also would help ease inflation.
“A year-long drop in rent would be a potential problem for the many investors who took out large loans to buy buildings where they thought they would be able to keep raising rents. They are facing a softer market, falling property values and interest rates that have roughly doubled from early last year.
“One of the rent measures, from real-estate brokerage Redfin, already shows asking rents turning negative with a decline of 0.6% in May, compared with the same month last year. The data includes both apartments and single-family rental homes, Redfin said.
“A decline in asking rent over a 12-month period has only happened one other time since the 2008 financial crisis, according to some data sources, when the rental market briefly dipped in 2020 because of the outbreak of Covid-19, ending a decadelong streak of rent increases.”