National rental market snapshot
According to Redfin, nationwide, rent prices climbed 0.8% year over year in May to $1,653, nearly matching the record high set in August 2022. However, prices fluctuated greatly depending on the region. Asking rents rose quickly in historically affordable Midwest metros, like Cincinnati (+10.9%), and fell the most in fast-growing Sun Belt metros, like Jacksonville (-10.1%).
While rent prices are rising, Redfin noted that they’re actually fairly stable compared to recent years, due to a surplus of supply. For example, they rose by 17.5% year-over-year during the pandemic housing frenzy, before falling by 4.1% last summer. Still, rent prices are nearly in record territory, posing serious affordability challenges for many renters.
Why are rents rising?
Apartment prices are closely tied to apartment supply. Consistent demand among young renters priced out of homeownership by high mortgage rates and house prices is helping to push prices higher. The Midwest, home to some of the most affordable housing costs, has seen among the largest price growth.
However, a sufficient supply of rentals and fall in renter migration is helping to keep prices from rising substantially. And in some places, such as pandemic-era hotspots in the Sun Belt, prices have actually fallen.
Why are rent prices rising the fastest in the Midwest?
Rent prices are rising in the Midwest in part because of the lack of new apartment construction in the past few years. The Midwest is also the most affordable region to live in, helping to boost demand at a time when housing affordability remains strained.
Why are rent prices falling the fastest in the Sun Belt?
The Sun Belt, which has been popular for years but really took off during the pandemic, saw the largest declines in asking rent prices. This is in large part because the region built more apartments than other parts of the country to meet the booming demand. Now, as the housing boom fades, property owners are having trouble renting their abundance of units.
What renters should do if prices are rising
If rent prices are rising in your area, the first step is to explore your options for negotiating with your landlord. Many landlords may be open to discussing lease terms, especially if you are a reliable tenant. Consider asking for a longer lease to lock in the current rate, or inquire about possible discounts for early or bulk payments. It can also help to research comparable rents in your neighborhood to have a stronger negotiating position.
Additionally, consider broadening your search to include less expensive neighborhoods or nearby cities where rent prices may be lower. Sharing an apartment with roommates can also help reduce costs. If relocating isn’t an option, look into financial assistance programs or local housing support services that might be available. Prioritizing and budgeting for essential expenses can also provide more flexibility to manage higher housing costs.
If you’re struggling to afford rent, you aren’t alone. Half of U.S. residents pay more than 30% of their income on rent. Budgeting and applying for financial assistance are among your best options.
What renters should do if prices are falling
If rent prices are falling in your area, it’s a good time to approach your landlord about asking for other concessions such as a free month’s parking or maintenance services. Or, if your lease is up for renewal soon, you can use the lower market rates as leverage to secure a better deal.
This may also be a good time to reassess your housing needs and preferences, possibly moving to a location that better suits your lifestyle. For example, consider searching for a more desirable neighborhood or springing for an upgraded apartment. And you’re in a financial position to do so, you may even be able to save for a down payment on a house.
Methodology
Asking rent figures in this report cover newly listed units in buildings with five or more units. The median is calculated based on a rolling three-month period. For example, the median asking rent for May 2024 covers rentals that were listed on Rent.and Redfin during the three months ending May 31, 2024.
Metro-level data in this report covers 33 of the 50 most populous U.S. metropolitan areas. National figures are based on data for the entire U.S.
Asking rents reflect the current costs of new leases. In other words, the amount shown as the median asking rent is not the median of what all renters are paying, but the median asking price of apartments available for rent.
