According to a report by Realtor.com®, rental prices in the U.S. decreased by 0.6% in November compared to the same period last year. This marks the seventh consecutive month of decline in rental prices, offering good news for price-sensitive tenants. The report surveyed rents for studio apartments, one-bedroom and two-bedroom apartments, condos, townhouses, and single-family homes in the 50 largest cities. Prices for two-bedroom units fell by 3.3%, one-bedroom prices dropped by 0.6%, and studio prices declined by 0.9%. The latest median rent is $1,717, down $12 from October and $59 from the peak in July of the previous year.
Real estate experts anticipate that as a new wave of rental properties becomes available, rental prices will continue to slide. The additional apartments are likely to create competition among landlords nationwide, leading to rental incentives and price reductions. Therefore, for tenants, it's a good time to explore more rental incentives and lower prices.
So, where have rental prices seen the most significant declines? According to Realtor.com's analysis, Orlando, Florida, experienced the largest drop in rental prices, with a 6% year-over-year decrease in November. Following closely were Portland, Oregon (-5.5%), Austin, Texas (-5.4%), Dallas, California, and Riverside (-4.1%). Los Angeles also saw a decline of 3.8%.
The decline in rental prices in these popular cities may be attributed to factors such as the increase in remote work during the COVID-19 pandemic and some individuals choosing to move to more affordable locations. During the pandemic, people could work remotely in beautiful and warm locations, but as more individuals are required to return to the office, they are returning to city centers. Consequently, the demand for rental markets in these areas has decreased.
Meanwhile, some places still see rising rental prices, such as major cities like Boston, New York, and Washington, D.C. These areas may be experiencing increases due to supply and demand dynamics and other factors. For example, the Boston metropolitan area saw a 6.1% year-over-year increase in November, possibly due to tight rental market conditions leading to price hikes.
