Apartment Rents Are Falling In More Than Half of Major Metros
By: Lynn Pollack
Apartment rents fell in more than half of the nation’s major markets this month, suggesting a widespread cooldown in a market that’s been buoyed by pandemic-driven shifts in consumer preferences.
Apartment List’s national index increased by just 0.1% in November, the lowest month-over-month growth rate all year. The uptick does come at a time when seasonality normally causes rents to dip, however, and the national median rent has increased by 17.8% since the beginning of the year, a staggering contrast to pre-pandemic averages, which sat around 2.6%.
The national median rent in November was $1,312 this month, still $117 greater than where Apartment List economists predict it would have been had pre-pandemic trends continued.
“With our national vacancy index ticking up for the third straight month, the rental market seems to be turning a corner from the unprecedented rent growth that has characterized most of this year,” Apartment List’s Chris Salvati writes in a new analysis of the November data. Rents declined the most in Boise, which has been a pandemic hotspot. Prices there were down 3.7% from October to November. San Francisco also saw sharp declines of 2.7%, and is one of the few cities where rents are still below pre-COVID levels. Rents fell by more than 1% in San Jose and Oakland, and rents also dropped in consecutive months in Minneapolis, Boston, Seattle, and Arlington, Va.
On the flip side, North Las Vegas claims the top spot for fastest pandemic-era rent growth, with prices up 38% since March 2020. Rents increased in the suburb by more than 1% last month.
Another big winner: the Sun Belt, especially Tampa, Phoenix, and (again) Las Vegas.
“In these markets the pandemic did not start a new trend, so much as accelerate an existing one,” Salvati says. “Affordability here was waning even before the pandemic ignited a rush of new rental demand.”
Vacancy also ticked up a bit last month to end November at 4.2%
“Although the recent increase has been modest and gradual, it represents an important inflection point, signalling that tightness in the rental market is finally beginning to ease,” Salvati says. “If our vacancy rate continues to increase in the coming months, it’s likely that rent growth will also continue to cool.”