Rent prices in the U.S. are finally cooling off, marking a significant shift after years of consistent increases. As of Q2 2024, the median asking rent for new apartments has dropped to $1,746, a 6.2% year-over-year decline, hitting its lowest point since Q3 2021. This marks the second consecutive quarter of rent price decreases and represents one of the largest drops seen in the past five years.
The decline in rent prices is being attributed, in part, to a surge in new apartment completions. In Q1 2024 alone, 98,290 new units were completed, the highest number in over a decade. This influx of new housing has helped ease the pressure on the rental market, contributing to the cooling trend.
Rent prices across different apartment sizes have also fallen. One-bedroom apartments saw a significant drop of 9%, bringing the median price down to $1,566. Two-bedroom units experienced a 4.5% decrease to $1,934, while three-bedroom apartments saw a smaller decline of 3%, with median prices now at $2,309.
Even with these declines, rent prices are still 10.5% higher than their pre-pandemic low of $1,580 in Q1 2020, but the downward trend suggests a possible stabilization in the housing market. After years of sharp increases, renters are finally seeing some relief.
Sources:
ycharts.com/indicators/us_median_asking_rent/chart/
www.redfin.com/news/new-construction-rents-q2/