U.S. renters are finally getting a break on their rent, with prices dropping in 11 major markets in January, according to new data by online realtor Redfin.
Median asking rent dropped to $1,942 last month, down from a 2022 peak of $2,053. While year-over-year rent growth is still up 2.4% overall, it's fallen considerably from a peak of 17.5% in March 2022, according to Redfin's analysis of the 50 largest metro markets.
Only four cities posted double-digit rent growth in January 2022, compared with 38 in January 2021.
The number of cities with price drops also continues to climb, from just two a year ago to 11 in January. Here's how much rent decreased in those places:
- Phoenix: -6.7%
- Oklahoma City: -6.3%
- New Orleans: -5.2%
- Minneapolis: -5.1%
- Houston: -4.9%
- Baltimore: -4.6%
- Birmingham, Alabama: -3.4%
- Chicago: -3.0%
- Virginia Beach, Virginia: -1.8%
- Seattle: -1.0%
- Austin, Texas: -0.4%
Rent growth has cooled largely because of slowing demand and growing supply, according to Redfin.
Housing formation — a measure of how many households are created — has slowed, too, likely due to economic uncertainty and rising inflation. This means that fewer people are moving out on their own, such as young adults who live with their parents to save money.
The trend of slowing price growth could continue: The nationwide rental vacancy is expected to grow in the coming months as more rentals hit the market, which could put downward pressure on prices.
"We're watching closely to see whether rents start falling year over year. That would be a welcome relief for renters because it hasn't happened since the onset of the pandemic," says Redfin chief economist Daryl Fairweather.
January rent prices for this study are based on 20,000 apartment listings from Rent.com for the 50 largest metro areas in the country.
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