A new report from Apartment List shows that typical rents are now the same nationwide as they were a year ago. The slowdown follows a period of unprecedented rent growth and a runup in supply.
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After a year of monthly declines in the growth of monthly rent, apartments are renting for the same today as they were a year ago, according to a new report released on Wednesday.
The report found that year-over-year rent growth fell to zero and is expected to continue as builders continue delivering new units that could drive up the number of vacant units for renters to choose from, according to Apartment List.
“Our national rent index increased by 0.4 percent over the course of June,” the report said, “but this monthly measurement of rent growth is gradually declining at a time of the year when it’s normally picking up steam.”
Because rent growth hit zero at a time when it’s normally red hot, Apartment List expects rent will decline on a year-over-year basis later this year.
The vacancy rate climbed to 7.2 percent. That matches a peak that was reached during the COVID-19 pandemic, Apartment List said. And it is expected to climb further, as builders wrap up construction on new units, giving renters the upper hand for the first time in years.
“With a record number of multifamily apartment units currently under construction, this vacancy rate will remain elevated,” the report said. That is expected to “put pressure on property owners to find tenants, rather than the other way around.”
The report was only the latest source of good news for inflation, which reached 40-year highs last year before beginning to fall.
Rent and the cost of housing makes up the biggest single item in federal inflation figures, and a two-year runup in the price of rent helped drive up inflation and keep it there.
But Apartment List said its June rent report reaffirmed that the impact of housing was falling out of the consumer price index (CPI).
“When our index peaked with record-setting rent growth in 2021 (17.8 percent), the rent component of CPI was still just starting to heat up,” the report said. “Now in 2023, our index shows that the rental market has been cooling rapidly for a year, but the CPI housing component has just recently hit its peak.”