The issue of housing rental in the United States continues to be disturbing for tenants due to the constant increases. According to the latest report from Realtor.com, in April 2023, the median rent in the top 50 US metropolitan areas increased 0.3% year-over-year for 0-2 bedroom properties, the fastest growth rate. low since the start of the pandemic. The median rent asked was $1,734, $4 more than last month and $43 less than the peakbut still $348 (25.1%) higher than the same period in 2019 (before the pandemic).
According to the report, the rental market experienced single-digit growth for the ninth consecutive month after fifteen months of slowdown from a growth peak of 16.4% in January 2022.
“A major factor contributing to this rapid slowdown is the record new construction of multi-family homesresulting in increased rental inventory,” says Realtor.com.
“Besides, the rental vacancy rate has reached its highest point since the first quarter of 2021, standing at 6.4% in the first quarter of 2023. As more new rental properties are added to the market, we anticipate that the vacancy rate will continue to gradually increase back to 7.2%, which was the norm from 2013-2019, improving conditions for renter households. report.
Despite a slowdown in annual rent growth, concerns about affordability continue to mount. Nearly 90% of respondents to the most recent Fannie Mae National Housing Survey believed that home rental prices would not improve in the next 12 monthsreflecting a gloomier outlook compared to the end of 2022.
In December 2022, 86% of renters believed that rental prices would not improve in the next 12 months. In April 2023, 66% thought they would go up, 12% thought they would go down, and 21% of those surveyed believed they would stay the same in the next 12 months. About 1% of those surveyed responded with ‘I don’t know’.
The report shows that rent has been growing faster in smaller units.
Rent by size:
· Studio: $1,444an increase of 2.1% ($30) year-over-year
· 1 bed: $1,618an increase of 1.2% ($19) year-over-year
· 2 bedrooms: $1,936an increase of 0.9% ($17) year-over-year.
The rentals in the Midwest continue to rise faster (4.9% year-over-year)while rents in the West (-2.6% year-over-year) and the Sunbelt market (-2.5%) were lower than a year ago.
Since rent increases were steeper for new tenants, many chose to avoid higher costs by renewal of their leaseswhich resulted in less mobility of the tenants.
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