Weakness in Western Rental Markets Drags Down Nationwide Results

Charlotte, NC, June 20, 2023-Truist reports that struggling rental markets in the West drag on nationwide results with rising supply pushing asking rents lower,

“According to Redfin, asking rents in the U.S. rose 1.4% during May from their April levels. Despite the increase, May asking rents were 0.6% lower than May 2022. This represents the first year over year decline in asking rents since March 2020. The nationwide y/y decline is being driven entirely by the West region, which fell 2.1% y/y. The Northeast, South and Midwest were all higher to varying degrees. Redfin noted increased supply as a contributing factor to cooling rents. The real estate firm said that some homeowners were moving into new homes and deciding to rent out their old homes while they wait for "improving market conditions." Supply has also ticked up due to the rising level of rental completions. Overall, the increased supply from both these sources is likely contributing to higher vacancy rates. Rental vacancy rates in the first quarter came in at 6.4%, which was the highest level in two years.”