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Rents Are Down for the First Time in Nearly Two Years in These Popular Metros

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Affordability

Rents Are Down for the First Time in Nearly Two Years in These Popular Metros

Rental costs are falling in formerly overheated metros, and more price drops are expected as the rental sector rebalances post-pandemic


September 27, 2022
Oceanfront apartments in Palm Beach, Florida
Image: Stock.adobe.com

After two years of consistent rent hikes pinching the pockets of new and existing renters, none of the nation’s top 40 largest markets saw year-over-year asking rents expand in August, signaling the start of a much-anticipated cooldown in an overheated rental market, Forbes reports. The rental sector posted negative monthly asking rent growth from July to August, with rents down 0.1% in July, and some popular destinations saw far more substantial declines midway through the summer.

By the end of August, rental prices in Palm Beach fell from 30.6% in the fourth quarter of 2021 to 8.2% a year later, and in Phoenix, rents are down year-over-year to 5.2% in August compared to 21% just eight months ago.

“After a 20-month run of positive monthly growth dating back to December 2020, the market finally witnessed negative asking rent growth on a monthly sequential basis from July to August, with rents down 0.1% in July,” said Jay Lybik, national director of multifamily analytics for CoStar Group. “We’re seeing a complete reversal of market conditions in just 12 months, going from demand significantly outstripping available units to now new deliveries outpacing lackluster demand.”

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