Rents slowed on an annual basis for the ninth straight month in February, rising just 1.7% year-over-year to $1,937, the smallest increase in two years and the lowest level recorded in a year, Forbes reports. The median asking rent is still 21.4% higher than it was in February 2020, but waning demand coupled with increasing supply has slowed rent growth substantially at the start of 2023.
The number of apartments under construction is up 24.9% year-over-year to 943,000, the highest level since 1974, but housing experts say rents could be bottoming out, as a strong labor market props up demand and contributes to stubborn inflation.
“Landlords are slowing their roll on rent increases because they’re grappling with a rise in vacancies as an influx of new apartments hits the market and demand slows from its peak,” said Redfin deputy chief economist Taylor Marr. “Rents are likely close to hitting a floor, though. That’s because stubbornly high inflation is boosting expenses for landlords, so instead of dropping rents they may seek to lure renters with other concessions, like free parking or a discounted security deposit.”
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