Apartment Asking Rents Rise at Slowest Annual Rate Since October

Rent increases tapered off in June, with the national median asking rent rising 14% from a year earlier–the smallest annual increase since October–reported Redfin, Seattle.

Asking rents rose 0.7% during June, the smallest month-over-month gain since the start of the year, said Redfin chief economist Daryl Fairweather.

“Rent growth is likely slowing because landlords are seeing demand start to ease as renters get pinched by inflation,” Fairweather said. “With the cost of gas, food and other products soaring, renters have less money to spend on housing.”

Fairweather said the slowdown in rent increases will likely continue, “however, rents are still climbing at unprecedented rates in strong job markets like New York and Seattle and in areas like San Antonio and Austin that soared in popularity during the pandemic,” she noted.

Redfin said asking rents rose 39% year over year in Cincinnati, the largest jump among the 50 largest U.S. metros. Next came Seattle, Austin, Texas and Nashville, all of which also saw increases exceeding 30%.

Miami, Fort Lauderdale and West Palm Beach dropped out of the top 10 in June as rental increases in the Florida metro areas began to moderate, the report said.

Just three of the 50 largest metros saw rents fall in June from a year earlier. Rents declined 12% in Milwaukee, 7% in Minneapolis and less than 1% in Kansas City, Mo. Those three metros saw rents decline in April and May as well.

“To combat soaring rents, more cities should follow Minneapolis’ lead,” Fairweather said. “Minneapolis eliminated single-family zoning in 2018, and last year got rid of a rule that required residential developers to include parking spaces. Now builders can replace parking spots with more housing units, which increases supply and therefore releases some upward pressure on rents.”