Rents Largely Flat in September, RealPage, Redfin Find

(Image courtesy of Redfin)

According to RealPage Analytics, Richardson, Texas, and Redfin, Seattle, rents were fairly flat in September.

RealPage reported that nationally, effective asking rents were down 0.3% in September, pulling year-over-year rent growth down to just 0.1%.

Rent cuts were most common in the West and the South, with some growth in the Northeast and Midwest.

Redfin’s data showed the median U.S. asking rent rising 0.4% year-over-year in September, with the median asking rent down 2% from a month earlier. But, the median asking rent is still only 2.1% below the record high.

“Rents have flattened because a boom in apartment building in recent years has flooded the market with supply, but they haven’t yet posted a substantial decline because there’s still demand for rentals—especially as high mortgage rates keep many would-be homebuyers and sellers on the sidelines,” said Redfin Economics Research Lead Chen Zhao. “There are still a lot of apartments under construction that will continue to hit the market, which should keep rents from increasing much in the near-to-medium term. But construction has started to slow, which should eventually help bolster rent prices.”

Redfin reported the number of completed apartment buildings rose 32% year-over-year in August to hit a seasonally adjusted annual rate of 433,000.

However, the number of apartment building starts declined 41% year-over-year.

RealPage reported the U.S. apartment market absorbed 90,827 units in the third-quarter, close to long-term seasonal norms and the largest quarterly result in almost two years.

This activity has pushed those flatter rents. “Falling rents in many markets despite solid demand reflects many operators prioritizing occupancy over pricing in order to protect cashflow,” wrote Jay Parsons, RealPage Senior Vice President and Chief Economist.