In September, the median asking rent in the United States increased by 0.4% year-over-year to $2,011 according to a report from Redfin. This marks the sixth consecutive month of minimal change in rents compared to the previous year. Prior to this trend, rent growth had significantly slowed for approximately one year following a surge in prices during the pandemic. However, there was a 2% decline in asking rents on a monthly basis.
According to Chen Zhao, lead researcher at Redfin Economics, this flattening of rents can be attributed to an increase in apartment construction which has flooded the market with supply. Despite this surplus of rental units available, there is still demand for rentals due partly due high mortgage rates deterring potential homebuyers and sellers from entering into transactions.
Zhao also notes that while there are still many apartments currently under construction that will continue adding inventory into the market and preventing significant increases in rent prices over time; however as new construction begins slowing down it may eventually help stabilize rental costs.
