Rent for one-bedroom units saw first
year-over-year decline since 2020
SANTA
CLARA, Calif., July 25,
2023 /PRNewswire/ -- The Realtor.com® June
Rental Report found that relief for renters continues, as rent
prices dropped even further, down 1.0% year over year. While the
median asking rent in the 50 largest metros increased to
$1,745, up by $7 from last month, it was down $31 from its July
2022 peak.
"The downward trend in rent prices continued in June, providing
a much-needed respite for renters and an opportunity to regain some
control over their housing expenses," said Realtor.com Chief
Economist Danielle Hale. "With our
midyear forecast update calling for slowing inflation,
better-than-expected labor market performance, and an increase in
multi-family supply, we're seeing some encouraging signs for
renters' budgets as we enter the second half of the year."
June marks the first year-over-year decrease in rent for
one-bedroom units since 2020, mirroring the first such drop in rent
for two-bedroom units in May.
While continuing rent price declines are helping to improve
affordability, it's important to note that rents remain
significantly elevated: 24.1% higher than the same time in 2019.
Rents for studios, for example, also continue to grow. The median
rent of studios was $1,445, up by
$14 (1.0%) year-over-year and
$229 (18.8%) higher than four years
ago.
June 2023 Rental Metrics by Unit
Size – National
Unit
Size
|
Median
Rent
|
Rent
YoY
|
Rent Change – June
2019
|
Overall
|
$1,745
|
-1.0 %
|
+24.1 %
|
Studio
|
$1,445
|
+1.0 %
|
+18.8 %
|
1-bed
|
$1,630
|
-0.7 %
|
+24.5 %
|
2-bed
|
$1,945
|
-1.0 %
|
+27.0 %
|
Western rents drop further as San
Jose experiences first decline
Rent in Western metros
continues to decline faster than other parts of the country (-3.8%
Y/Y). San Jose, the last large
western metro to show a decline in rental prices, saw its first
year-over-year rent drop in nearly two years (-1.4%). In contrast,
rents in northeastern hubs such as New
York City (+4.7%) and Boston (+2.5%) continued to climb more
quickly. The strong labor market in the Northeast is likely driving
demand, although increasing supply may help ease the upward
pressure on rent prices. Rents in the Midwest are still climbing
(+3.2%), due to greater affordability in the region. Of the Top 10
metros experiencing the most rent growth, half are located in the
Midwest. Meanwhile, rents in the South (-1.3%) dropped lower than a
year ago.
Youngest metros offer affordability, tech
jobs
Affordable rent and job prospects are key factors for
young people choosing a place to live. Of the 10 metros with the
highest share of young households and young renters (aged 25-34),
Oklahoma City ranks as the most
affordable, with younger individuals spending only 18.7% of their
monthly income on the typical rental during June. This age group,
which makes up 30% of employees in the tech sector, according to
our estimation from the Current Population Survey, is renting in
areas with high tech growth, suggesting that tech jobs hold
considerable appeal for young households. Six of the metros with
the highest share of young renters also had higher-than-average
annual growth in their tech sectors (+0.8%). Nine of the 10
experienced positive growth rates overall, led by Seattle (+3.9%), Orlando, Fla. (+2.8%), and Denver (+2.2%).
Metros with Highest Share of Young Renter Households in June
(Aged 25-34)
Rank
|
Metros
|
Share
of
25-34
Renters
|
Median
Rent
|
%. of
Income
Spent on
Rent
25-34
|
Tech
Sector
Annual
Growth
Rate
(2019-2021)
|
1
|
Denver-Aurora-Lakewood,
CO
|
30.5 %
|
$1,984
|
26.7 %
|
2.2 %
|
2
|
Nashville-Davidson et
al, TN
|
29.7 %
|
$1,678
|
27.8 %
|
0.2 %
|
3
|
Columbus, OH
|
29.4 %
|
$1,211
|
19.7 %
|
1.1 %
|
4
|
Seattle-Tacoma-Bellevue, WA
|
29.3 %
|
$2,142
|
24.8 %
|
3.9 %
|
5
|
Virginia Beach et al,
VA-NC
|
28.9 %
|
$1,438
|
25.0 %
|
-2.2 %
|
6
|
Orlando-Kissimmee-Sanford, FL
|
27.6 %
|
$1,762
|
32.8 %
|
2.8 %
|
7
|
Austin-Round Rock,
TX
|
27.5 %
|
$1,686
|
23.9 %
|
1.1 %
|
8
|
San Antonio-New
Braunfels, TX
|
27.3 %
|
$1,297
|
23.7 %
|
0.7 %
|
9
|
Oklahoma City,
OK
|
27.3 %
|
$1,025
|
18.7 %
|
1.5 %
|
10
|
Indianapolis-Carmel-Anderson, IN
|
27.2 %
|
$1,350
|
24.1 %
|
0.7 %
|
|
Top 50
Average
|
25.5 %
|
$1,745
|
27.0 %
|
0.8 %
|
"The continuing declines in rental prices mark a promising shift
for renters after months where many renters spent more than
they could afford on housing costs," said Realtor.com®
Economist Jiayi Xu. "We expect to
see rental prices continue to show small year-over-year declines
through the end of the year."
Rental Data – 50 Largest Metropolitan Areas – June 2023
Metro
|
Median
Rent
0-2
bedroom
|
Year-over-Year
0-2
bedroom
|
Atlanta-Sandy
Springs-Roswell, GA
|
$1,655
|
-4.30 %
|
Austin-Round Rock,
TX
|
$1,686
|
-8.60 %
|
Baltimore-Columbia-Towson, MD
|
$1,807
|
-0.20 %
|
Birmingham-Hoover,
AL
|
$1,320
|
4.40 %
|
Boston-Cambridge-Newton, MA-NH
|
$2,769
|
2.50 %
|
Buffalo-Cheektowaga-Niagara Falls, NY
|
NA
|
NA
|
Charlotte-Concord-Gastonia, NC-SC
|
$1,593
|
-5.00 %
|
Chicago-Naperville-Elgin, IL-IN-WI
|
$1,705
|
-0.10 %
|
Cincinnati,
OH-KY-IN
|
$1,188
|
5.60 %
|
Cleveland-Elyria,
OH
|
$1,236
|
-0.40 %
|
Columbus, OH
|
$1,211
|
1.40 %
|
Dallas-Fort
Worth-Arlington, TX
|
$1,541
|
-5.70 %
|
Denver-Aurora-Lakewood,
CO
|
$1,984
|
-2.90 %
|
Detroit-Warren-Dearborn, MI
|
$1,354
|
2.90 %
|
Hartford-West
Hartford-East Hartford, CT
|
NA
|
NA
|
Houston-The
Woodlands-Sugar Land, TX
|
$1,417
|
0.70 %
|
Indianapolis-Carmel-Anderson, IN
|
$1,350
|
6.90 %
|
Jacksonville,
FL
|
$1,538
|
-0.90 %
|
Kansas City,
MO-KS
|
$1,317
|
3.30 %
|
Las
Vegas-Henderson-Paradise, NV
|
$1,479
|
-6.60 %
|
Los Angeles-Long
Beach-Anaheim, CA
|
$2,791
|
-2.70 %
|
Louisville/Jefferson
County, KY-IN
|
$1,210
|
4.70 %
|
Memphis,
TN-MS-AR
|
$1,318
|
0.80 %
|
Miami-Fort
Lauderdale-West Palm Beach, FL
|
$2,462
|
-0.80 %
|
Milwaukee-Waukesha-West
Allis, WI
|
$1,614
|
7.00 %
|
Minneapolis-St.
Paul-Bloomington, MN-WI
|
$1,508
|
1.00 %
|
Nashville-Davidson–Murfreesboro–Franklin,
TN
|
$1,678
|
-1.70 %
|
New Orleans-Metairie,
LA
|
NA
|
NA
|
New York-Newark-Jersey
City, NY-NJ-PA
|
$2,899
|
4.70 %
|
Oklahoma City,
OK
|
$1,025
|
6.60 %
|
Orlando-Kissimmee-Sanford, FL
|
$1,762
|
-4.60 %
|
Philadelphia-Camden-Wilmington,
PA-NJ-DE-MD
|
$1,768
|
0.60 %
|
Phoenix-Mesa-Scottsdale, AZ
|
$1,605
|
-6.10 %
|
Pittsburgh,
PA
|
$1,458
|
2.00 %
|
Portland-Vancouver-Hillsboro, OR-WA
|
$1,713
|
-3.00 %
|
Providence-Warwick,
RI-MA
|
$1,830
|
2.70 %
|
Raleigh, NC
|
$1,579
|
-2.80 %
|
Richmond, VA
|
$1,475
|
4.90 %
|
Riverside-San
Bernardino-Ontario, CA
|
$2,281
|
-5.60 %
|
Rochester,
NY
|
NA
|
NA
|
Sacramento–Roseville–Arden-Arcade, CA
|
$1,852
|
-4.10 %
|
San Antonio-New
Braunfels, TX
|
$1,297
|
0.20 %
|
San Diego-Carlsbad,
CA
|
$3,029
|
-1.10 %
|
San
Francisco-Oakland-Hayward, CA
|
$2,960
|
-4.90 %
|
San
Jose-Sunnyvale-Santa Clara, CA
|
$3,301
|
-1.40 %
|
Seattle-Tacoma-Bellevue, WA
|
$2,142
|
-3.40 %
|
St. Louis,
MO-IL
|
$1,287
|
4.60 %
|
Tampa-St.
Petersburg-Clearwater, FL
|
$1,766
|
-4.70 %
|
Virginia
Beach-Norfolk-Newport News, VA-NC
|
$1,438
|
-1.90 %
|
Washington-Arlington-Alexandria,DC-VA-MD-WV
|
$2,232
|
2.40 %
|
Methodology
Rental data as of June 2023 for studio, 1-bedroom, or 2-bedroom
units advertised as for-rent on Realtor.com®.
Rental units include apartments as well as private rentals (condos,
townhomes, single-family homes). We use rental sources that
reliably report data each month within the top 50 largest
metropolitan areas. Realtor.com® began publishing
regular monthly rental trends reports in October 2020 with data history stretching back to
March 2019.
With the release of its June rent report,
Realtor.com® incorporated a new and improved
methodology for capturing and reporting more comprehensive rental
listing trends and metrics. The new methodology is expected to
yield a cleaner, more representative and more consistent
measurement of rental listings and trends at both the national and
local level. The methodology has been adjusted to better represent
the true cost of primary housing for renters. Most areas across the
country will see minor changes with a smaller handful of areas
seeing larger updates. As a result of these changes, the rental
data released since June 2023 will
not be directly comparable with previous releases and
Realtor.com® economics blog posts. However,
future data releases, including releases about historical data,
will consistently apply the new methodology.
We define young households and young renters as those aged
between 25-34 years old. We exclude renters aged below 25 years old
to minimize the impact of college renters. To calculate the share
of annual income spent on rents for households aged between 25-34,
we used the annual median household income data sourced from
Claritas.
We leverage Brookings' definition and define the technology
sector as six industries from 2017 North American Industry
Classification System (NAICS): Computer and Equipment Manufacturing
(3341), Semiconductor and Other Electronic Component Manufacturing
(3344), Software Publishers (5112), Data Processing, Hosting, and
Related Services (5182), Other Information Services (5191), and
Computer System Design and Related Services (5415). With this
definition, we calculated the share of tech labor by age using the
2022 Current Population Survey. The compound annual growth rate for
the tech sector is calculated based on the number of employees in
the technology industry sourced from 2019 and 2021 County Business
Patterns data.
About
Realtor.com®
Realtor.com® is an
open real estate marketplace built for everyone.
Realtor.com® pioneered the world of digital real
estate more than 25 years ago. Today, through its website and
mobile apps, Realtor.com® is a trusted guide for
consumers, empowering more people to find their way home by
breaking down barriers, helping them make the right connections,
and creating confidence through expert insights and guidance. For
professionals, Realtor.com® is a trusted partner
for business growth, offering consumer connections and branding
solutions that help them succeed in today's on-demand world.
Realtor.com® is operated by News Corp [Nasdaq:
NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more
information, visit Realtor.com®.
Media contact: press@realtor.com
View original
content:https://www.prnewswire.com/news-releases/realtorcom-june-rental-report-rent-prices-continue-downward-trend-301884523.html
SOURCE Realtor.com