Median U.S. Rent Rose 0.9% YOY in August
Seattle, WA, Setpember 16, 2024-The median U.S. asking rent rose 0.9% year over year in August to $1,645-the biggest annual increase since April 2023, according to RedFin. Rents were up 0.1% on a month-over-month basis.
Rents for zero to one bedroom apartments ticked up 0.1% year over year to $1,495, while two bedroom apartments remained unchanged at $1,725. Rents for three or more bedroom apartments fell 1.7% to $2,008. The discrepancy between the overall result (showing a 0.9% gain) and the three different bedroom counts (which either fell, remained the same, or rose by a lower amount) is the result of a statistical phenomenon known as Simpson’s paradox.
While rents rose the most in nearly 18 months, August marked two years from when they hit an all-time high. Lower rents, paired with wages growing 3.8% year over year, show that rental affordability has improved.
Multifamily building completions are at historic highs in 2024 and in some areas supply now outweighs demand. That is driving some building owners to reduce rents and offer concessions to prospective tenants.
“Almost everything in our lives costs more than it did two years ago-but rents have remained largely stable thanks to the construction boom, especially across the Sun Belt states,” said Redfin senior economist Sheharyar Bokhari. “We are seeing rents tick up a little now that new construction is starting to slow down, but asking rents are likely to stay relatively flat for some time due to the backlog of new apartments that are still coming onto the market.”