Rents for studio units saw their first
year-over-year decline since 2020
SANTA
CLARA, Calif., Aug. 21,
2023 /PRNewswire/ -- The
Realtor.com® July Rental Report revealed a third
consecutive month of better news for renters in many parts of the
country, with a continued decline in year-over-year rent prices for
0-2 bedroom properties, down -1.0% from July
2022, driven in part by a rising rental supply.
The median asking rent in the 50 largest metros increased
$15 to $1,759 from June to July
2023, but remains down $18
from the peak 12 months ago. July also marks the first
year-over-year decrease in rent for studio units since 2020,
continuing the downward trend led by two-bedroom units in May and
one-bedroom units in June.
"Renters in many areas are now spending slightly less on rent
relative to their overall income, giving their budgets a little
more breathing room at a time of stubborn inflation and ongoing
affordability concerns," said Danielle
Hale, Chief Economist at Realtor.com®. "With our
midyear forecast update noting a surge in multi-family construction
and an uptick in vacancy rates, we anticipate this downward
pressure on rent prices will continue, providing many renters with
much-needed stability in their housing expenses. Given the current
rental market momentum and seasonal trends, it will be very
unlikely to see a new peak rent in 2023."
July 2023 Rental
Metrics by Unit Size – National
|
Unit
Size
|
Median
Rent
|
Rent
YoY
|
Rent Change – July
2019
|
Overall
|
$1,759
|
-1.0 %
|
24.7 %
|
Studio
|
$1,445
|
-0.4 %
|
18.0 %
|
1-bed
|
$1,642
|
-0.6 %
|
24.9 %
|
2-bed
|
$1,948
|
-1.1 %
|
26.9 %
|
Affordability advancing slowly, supported by new
supply
In July 2023,
nationwide rent was slightly more affordable than July of the
previous year. To be considered affordable, one rule of thumb is
that housing costs should fall below 30% of gross household income.
In July 2023, people earning the
typical household income and looking to rent would be spending
25.9% of their earnings to lease a typical for-rent home, down from
26.5% in July 2022. This positive
change can be attributed to a combination of declining median rents
and rising median household income. Additionally, increased supply
is boosting vacancy rates and helping drive down rents. However,
vacancy rates still remain below pre-pandemic levels, rent prices
are elevated overall, and affordability continues to be a
significant issue. Renters in eight of the top 50 metros, for
example, pay a rent share higher than 30% relative to the median
household income.
Middle America remains an affordable oasis between costly
coastal locations, for now
The least affordable markets in
July 2023 include coastal and Sun
Belt locations, where renters often spent more than 30% of the
median household income on housing costs. Miami, Fla., was by far the least affordable
rental market, followed by Los
Angeles, San Diego,
New York City, Boston, Riverside,
Calif., Tampa, Fla., and
Orlando, Fla. In three of these
eight cities, affordability has worsened compared with last year.
In Miami, for example, renters would have spent 44.2% of their
monthly paycheck on the typical rental in July 2023. Conversely, Oklahoma City was the most affordable rental
market in July 2023, with renters
spending 18.4% of their median household income on housing. Other
affordable rental markets include midwestern mainstays such as
Columbus, Ohio; Minneapolis, Minn.; Cincinnati; and Kansas City, Kan.
South and West affordability improves, Midwest rents
rise
While rents in the South and West remain high,
these areas show improved affordability, following a consistent
downward rental cost trend during the preceding months. The most
significant improvement was Riverside,
Calif., where renters with a typical household income would
spend 33.9% of their monthly paycheck on the typical rental in
July 2023; while higher than the 30%
affordability threshold, this represents a decline of 3.4
percentage points compared with 12 months ago. Meanwhile, strong
demand in Midwest markets such as Milwaukee-Waukesha,
Wis.; Birmingham, Ala.; and
Indianapolis is driving lower
vacancy rates and faster rent growth, eroding affordability in more
traditionally budget-friendly locations.
"As renters determine their next move, whether it's to stay put,
save up to buy a home, or move and rent in a new location, the
rental landscape is showing signs of improvement," said
Jiayi Xu, Economist at
Realtor.com®. "To determine if renting remains the right
choice for your household, free, trusted tools like our Rent Vs.
Buy Calculator or our most affordable markets research can help
renters make more informed housing decisions."
Rental Data – 50
Largest Metropolitan Areas – July 2023
|
Metro
|
Median
Rent (0-2
Bedrooms)
|
YOY (0-2
Bedrooms)
|
July 2023 Rent
Share of Income
|
July 2022 Rent
Share of Income
|
Atlanta-Sandy
Springs-Roswell, GA
|
1,687
|
-4.5 %
|
24.8 %
|
26.7 %
|
Austin-Round Rock,
TX
|
1,725
|
-7.9 %
|
22.8 %
|
24.7 %
|
Baltimore-Columbia-Towson, MD
|
1,855
|
2.1 %
|
23.8 %
|
24.0 %
|
Birmingham-Hoover,
AL
|
1,297
|
3.9 %
|
23.7 %
|
22.9 %
|
Boston-Cambridge-Newton, MA-NH
|
3,135
|
4.7 %
|
35.4 %
|
34.6 %
|
Buffalo-Cheektowaga-Niagara Falls, NY
|
NA
|
NA
|
NA
|
NA
|
Charlotte-Concord-Gastonia, NC-SC
|
1,601
|
-4.5 %
|
25.9 %
|
27.5 %
|
Chicago-Naperville-Elgin, IL-IN-WI
|
1,764
|
-0.9 %
|
25.4 %
|
25.6 %
|
Cincinnati,
OH-KY-IN
|
1,251
|
5.2 %
|
19.7 %
|
19.3 %
|
Cleveland-Elyria,
OH
|
1,254
|
0.6 %
|
23.9 %
|
23.7 %
|
Columbus, OH
|
1,204
|
2.3 %
|
18.7 %
|
19.0 %
|
Dallas-Fort
Worth-Arlington, TX
|
1,546
|
-5.6 %
|
22.7 %
|
24.2 %
|
Denver-Aurora-Lakewood,
CO
|
1,977
|
-2.0 %
|
24.5 %
|
25.3 %
|
Detroit-Warren-Dearborn, MI
|
1,351
|
3.0 %
|
23.0 %
|
22.5 %
|
Hartford-West
Hartford-East Hartford, CT
|
NA
|
NA
|
NA
|
NA
|
Houston-The
Woodlands-Sugar Land, TX
|
1,432
|
1.2 %
|
23.1 %
|
22.7 %
|
Indianapolis-Carmel-Anderson, IN
|
1,329
|
4.3 %
|
22.2 %
|
21.5 %
|
Jacksonville,
FL
|
1,541
|
0.9 %
|
25.3 %
|
25.2 %
|
Kansas City,
MO-KS
|
1,309
|
1.3 %
|
20.3 %
|
20.4 %
|
Las
Vegas-Henderson-Paradise, NV
|
1,530
|
-4.9 %
|
26.8 %
|
27.6 %
|
Los Angeles-Long
Beach-Anaheim, CA
|
2,822
|
-3.1 %
|
39.1 %
|
40.3 %
|
Louisville/Jefferson
County, KY-IN
|
1,204
|
3.6 %
|
21.1 %
|
20.7 %
|
Memphis,
TN-MS-AR
|
1,333
|
-0.9 %
|
25.3 %
|
26.5 %
|
Miami-Fort
Lauderdale-West Palm Beach, FL
|
2,455
|
-1.2 %
|
44.2 %
|
44.0 %
|
Milwaukee-Waukesha-West
Allis, WI
|
1,618
|
6.8 %
|
26.8 %
|
25.2 %
|
Minneapolis-St.
Paul-Bloomington, MN-WI
|
1,490
|
0.9 %
|
19.1 %
|
19.2 %
|
Nashville-Davidson–Murfreesboro–Franklin,
TN
|
1,666
|
-1.4 %
|
25.7 %
|
25.9 %
|
New Orleans-Metairie,
LA
|
NA
|
NA
|
NA
|
NA
|
New York-Newark-Jersey
City, NY-NJ-PA
|
2,859
|
5.7 %
|
37.0 %
|
35.0 %
|
Oklahoma City,
OK
|
1,032
|
4.0 %
|
18.4 %
|
17.8 %
|
Orlando-Kissimmee-Sanford, FL
|
1,781
|
-5.2 %
|
31.3 %
|
32.6 %
|
Philadelphia-Camden-Wilmington,
PA-NJ-DE-MD
|
1,777
|
1.9 %
|
25.7 %
|
25.6 %
|
Phoenix-Mesa-Scottsdale, AZ
|
1,600
|
-4.6 %
|
24.5 %
|
26.4 %
|
Pittsburgh,
PA
|
1,478
|
1.1 %
|
25.3 %
|
25.0 %
|
Portland-Vancouver-Hillsboro, OR-WA
|
1,703
|
-4.2 %
|
23.1 %
|
24.3 %
|
Providence-Warwick,
RI-MA
|
NA
|
NA
|
NA
|
NA
|
Raleigh, NC
|
1,578
|
-4.8 %
|
21.5 %
|
22.5 %
|
Richmond, VA
|
1,493
|
5.8 %
|
22.8 %
|
22.5 %
|
Riverside-San
Bernardino-Ontario, CA
|
2,240
|
-7.8 %
|
33.9 %
|
37.3 %
|
Rochester,
NY
|
NA
|
NA
|
NA
|
NA
|
Sacramento–Roseville–Arden-Arcade, CA
|
1,905
|
-3.7 %
|
26.6 %
|
27.9 %
|
San Antonio-New
Braunfels, TX
|
1,298
|
-1.7 %
|
22.6 %
|
22.9 %
|
San Diego-Carlsbad,
CA
|
3,045
|
-0.6 %
|
39.1 %
|
39.3 %
|
San
Francisco-Oakland-Hayward, CA
|
2,966
|
-4.3 %
|
27.8 %
|
29.2 %
|
San
Jose-Sunnyvale-Santa Clara, CA
|
3,338
|
-0.8 %
|
27.0 %
|
27.9 %
|
Seattle-Tacoma-Bellevue, WA
|
2,100
|
-3.7 %
|
23.7 %
|
24.9 %
|
St. Louis,
MO-IL
|
1,336
|
3.5 %
|
21.2 %
|
21.0 %
|
Tampa-St.
Petersburg-Clearwater, FL
|
1,834
|
-3.8 %
|
33.7 %
|
35.1 %
|
Virginia
Beach-Norfolk-Newport News, VA-NC
|
1,388
|
-3.9 %
|
21.5 %
|
23.1 %
|
Washington-Arlington-Alexandria,DC-VA-MD-WV
|
2,231
|
2.1 %
|
22.7 %
|
22.7 %
|
Methodology
Rental data as of July 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 July 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 July 2023 will not be directly
comparable with previous releases and Realtor.com® economics blog
posts. However, future data releases, including historical data,
will consistently apply the new methodology.
Rental affordability analysis: The affordable monthly rent is
calculated by applying the 30% rule to the estimated 2023 monthly
median household income nationwide ($6,793 across the 50 largest U.S. metros, on
average) and in each metro. The monthly median household income is
derived from the annual median household income data sourced from
Claritas. Due to the methodology changes noted above,
Realtor.com® has made historical revisions to its prior
affordability analyses. For our most recently published
affordability analysis on February
2023 data published in March
2023, the national rent-to-income share has been updated to
25.1%.
About Realtor.com®
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trusted guide for consumers, empowering more people to find their
way home by breaking down barriers, helping them make the right
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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
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