Yes, Rents Are Cooling, But How Much Varies by Market

Rental markets are finally cooling, according to a recent report from the Joint Center for Housing Studies of Harvard University. The report, titled "America’s Rental Housing 2024," found that rent growth in recent months has cooled as supply outpaces demand. During the fourth quarter of 2023, asking rents rose by just 0.2% year over year in the professionally managed apartment market—a dramatic change from the 15.3% increase we saw early in 2022.

But it's still unclear whether this cooling off will be enough to counteract the high rent increases of the pandemic, which persist in many markets. And while the report found that rents did fall in some locales, increases were still the norm, although the rate of increase was slower than during 2022.

Rent growth is also moderating across a wider range of markets than in previous years. At the end of 2023, nominal asking rents fell by an average of about 2 percent in 59 of the 150 markets tracked by RealPage. However, rents remain high, as this modest decrease came after significant rent increases in 2022. For example, rents dropped by more than 5 percent in five markets (Austin, Boise City, Cape Coral-Fort Myers, North Port-Sarasota, and Jacksonville), following year-over-year increases of more than 20 percent in the first quarter of 2022 when national rent growth peaked.

While rents fell in some places, increases were still the norm, albeit at a slower rate of growth. The 91 markets where rent was still rising at the end of 2023 posted an average growth rate of about 3 percent, and just eight markets grew by at least 5 percent year over year (Figure 3). This was a swift turnaround from the first quarter of 2022 when rents rose in every market by an average of 14 percent. At the peak, rents increased by more than 5 percent in all but four markets and by more than 20 percent in 25 markets.

Read more