Monthly rents dipped 0.5% year-over-year in May to a median of $1,739 in the nation’s 50 largest metropolitan areas, and while that may not seem like a substantial drop, it marks the first time in years that U.S. rents have dropped annually. Rents vary regionally, and constricted supply in some markets is still keeping costs elevated for local renters, but a few affordable locations offer major bargains for budget-conscious tenants.
Rents are falling the fastest in cities such as Las Vegas and Riverside, Calif., which were among the hottest markets in the country throughout the COVID-19 pandemic. Sin City posted a 6% annual drop in May, while the Riverside metro area saw prices fall by 5.9% year-over-year, according to Realtor.com.
The West saw a 3% overall rental price drop over the past year, the largest regional decline. However, rental prices in the more affordable Midwest and Northeast are still rising—much to the dismay of tenants.
“With renters actively seeking more affordable places to live, it is expected that lower-rent markets, particularly those in the Midwest region, will experience relatively stronger rental demand, leading to accelerated growth in rents,” Jiayi Xu writes in the Realtor.com monthly rental report.