U.S. median rent increased 0.8% year-on-year to $1,653 in May, the highest level since October 2022.
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U.S. asking rents rose for a second consecutive month in May, reaching their highest level since 2022, according to Redfin data.
U.S. median rent increased 0.8% annually in May to $1,653, the highest level since October 2022 and just $47 below the all-time high, according to a report released Tuesday.
May’s growth followed an annualized rate of 0.9% in April, following 11 consecutive months of declines. The report notes that while prices are beginning to rise again, price increases are being restrained by the large inventory of new apartments still on the market following the post-pandemic construction boom. May’s 0.8% growth was solid compared with the 17..5% growth recorded during the pandemic and the 4.1% decline recorded last summer.
“Demand from younger renters remains high as many of them choose to stay where they are rather than deal with an increasingly unaffordable home buying market,” said Sheharyar Bokhari, senior economist at Redfin. “But so far, rental prices have Growth is limited as there are enough new apartments to meet demand even during the busiest time of year for the rental market.”
The report noted that the rental vacancy rate has hovered around 6.6% over the past three quarters, the highest level since 2021, but the rate is no longer increasing as it was during the pandemic.
Washington, D.C., saw the largest annual increase, with rent prices in the city increasing by 11.1% year over year. This was followed by Cincinnati (up 10.9%), Chicago (up 10.8%) and Virginia Beach (up 10.3%).
The report notes that rents are rising sharply in the Midwest because the region is not building enough new homes to meet demand.
Rents continued to fall in Sun Belt cities that have surged during the pandemic and built more new housing than other cities, including down 10.1% in Jacksonville, Fla., 8.7% in San Diego and 7.2% in Austin. Decrease percentage.
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