Home Rents Fall in 28 Major US Metros

Falling rents and high costs of buying homes are pushing many people to stick with renting.

A sign posted in front of an apartment building in San Francisco on June 9, 2023. Justin Sullivan/Getty Images

Median residential asking rents declined in 28 out of 44 major metros in the United States last month on an annual basis, the highest number since September 2023, real estate brokerage Redfin said in a June 4 statement.

Austin, Texas, saw the largest percentage decline in May among the 44 metros analyzed by the company, with the median asking rent dipping 8.8 percent to $1,385 year over year. It was followed by Minneapolis; Columbus, Ohio; Nashville; and Portland, Oregon.

Nationwide, the median asking rent dropped 1 percent year over year in May to $1,633.

“Apartment construction in America has been hovering near a 50-year high, and even though renter demand is strong, it’s not keeping pace with supply,” Sheharyar Bokhari, Redfin’s senior economist, said.

“Many units are sitting vacant for months, which means renters have power to negotiate concessions and landlords have less leeway to keep rents high.”

Less than half of newly built apartments are being rented out within a three-month period, which the brokerage said was “one of the lowest shares on record.”

According to the company, declining rents and rising homebuying costs in several cities are prompting many Americans to stick with rentals rather than purchasing a home.

Nicole Stewart, a Redfin Premier real estate agent in Boise, Idaho, said: “People are finding rentals that are nicer than the house they could afford at the same monthly cost. That’s in part because a lot of home sellers are overpricing their properties as they struggle to adjust to the changing housing market.”

Although rents are declining, they remain elevated, putting pressure on households.

In a May 12 statement, real estate marketplace Zillow reported that renters nationwide must earn over $80,000 annually to afford a typical rental, up from $60,000 five years ago. This jumps to six figures in eight major metro regions.

Since 2020, rent for a typical apartment has risen by 28.7 percent, with rents for single-family homes increasing by 42.9 percent. However, median household income during this period rose by only 22.5 percent, resulting in renters having to bear higher rental burdens.

Some respite may be coming this week. According to Zillow, its data show that the first week of June typically brings a spike in activity on its platform, including a jump in rental applications and contacts with property managers.

“Knowing when demand spikes can help renters plan ahead, act quickly, and use smart tools to find a place that checks all their boxes without blowing their budget,” Emily McDonald, rental trends expert at the company, said.

Tackling High Rental Costs

Congress is taking action to prevent unnecessary hikes in rental prices.

In February, a group of lawmakers announced the “Preventing Algorithmic Collusion Act,” aimed at blocking companies from using algorithms to set rental prices.

In March, Sen. Raphael Warnock (D-Ga.) unveiled a host of bills aimed at tackling the housing affordability crisis, his office said in a March 14 statement.

One of the bills is the Rent Relief Act, which seeks to subsidize rents paid by Americans when they exceed a specific threshold, which is expected to help people save more of their income.

“We have a housing affordability and availability crisis in this country, and I’m especially concerned about young Americans and their ability to pay rent or buy their first home,” Warnock said.

“Last year, we actually saw the largest increase in rental costs in a decade, while the share of first-time homebuyers reached an all-time low. Tough pickings whether you’re a renter, or looking to buy.”