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.”