Redfin Reports Asking Rents Rose for the Third-Straight Month in March, Driven By the Midwest
April 10 2024 - 8:00AM
Business Wire
The median U.S. asking rent rose 1% from a year
earlier. By comparison, rents jumped 5% in the Midwest—in part
because the region hasn’t seen as big of a construction boom as
other parts of the country.
(NASDAQ: RDFN) —The median U.S. asking rent rose 0.8% year over
year to $1,987 in March, marking the third consecutive increase
following three months of decreases, according to a new report from
Redfin (redfin.com), the technology-powered real estate brokerage.
Asking rents were little changed from February (+0.3%).
Rising rents in the Midwest and Northeast helped drive the
national uptick in rents, and elevated mortgage rates also likely
contributed. The average 30-year-fixed mortgage rate is 6.82%,
below the 23-year high of almost 8% hit in October, but still more
than double the all-time low of 2.65% hit during the pandemic. Many
people are delaying home purchasing plans because monthly payments
for homebuyers are near their record high. That’s bolstering rental
demand, and as a result, rent prices.
Housing costs are so high that many Americans can't afford to
buy homes, but rents are also elevated, putting a lot of people
searching for housing between a rock and a hard place. The median
asking rent in March was just 3.3% ($67) below the record high of
$2,054 hit in August 2022.
The good news for renters is that prices aren’t growing nearly
as fast as they were during the pandemic, and are more predictable.
Rents soared by as much as 17.7% year over year in 2022 due to the
pandemic moving frenzy, and then quickly cooled in 2023, falling by
as much as 2.1% as an influx of apartment supply drove up
vacancies. Year-over-year rent growth has stayed below 3% since the
start of 2023. The number of apartments under construction remains
near a record high, meaning there’s still a lot of supply in the
pipeline, which will likely prevent rents from increasing
dramatically in the near future.
“During the pandemic, you saw property owners charging $2,800 a
month in rent for a house that a year earlier cost $2,000,” said
Heather Mahmood-Corley, a Redfin Premier real estate agent in
Phoenix. “But the economy has changed and many people are trying to
curb their spending, which means it’s harder for property owners to
get renters to agree to big rent hikes.”
Midwest Sees Asking Rents Rise 5% to Record High
The median asking rent in the Midwest hit a record $1,456 in
March, up 5.3% from a year earlier—a larger gain than any other
region. The second biggest increase was in the Northeast, where
asking rents climbed 3.8% to $2,504. Rents were roughly flat in the
South (+0.3% to $1,656), and fell slightly in the West (-0.7% to
$2,365).
Rents are likely holding up best in the Midwest and Northeast
because those regions haven’t been building as much housing as the
South and West, meaning landlords aren’t under as much pressure to
fill vacancies. Fewer vacancies means more competition between
renters, which makes it easier for property owners to raise
rents.
The Midwest is also the most affordable region to live in, which
helps keep demand afloat at a time when housing affordability is so
strained. It has a lower-than-average unemployment rate, and has
recently attracted major tech companies, such as Google in Kansas
City.
To view the full report, including charts and methodology,
please visit:
https://www.redfin.com/news/redfin-rental-report-march-2024
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240410022347/en/
Redfin Journalist Services: Kenneth Applewhaite, 206-414-8880
press@redfin.com
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