Asking rents fell year-over-year in May for the first time since 2020, and though a 0.5% annual drop may seem insignificant after months of steady gains, it signals a much-anticipated correction in the rental market and provides relief for cost-burdened renters. The 0.5% decline sent the median monthly rental cost to $1,739, but some metro areas are still seeing rents reach new heights even as the national median falls.
Cities such as Columbus, Ohio, St. Louis, and Cincinnati saw the biggest annual gains in May with increases of 9.3%, 7.7%, and 7.5%, respectively, according to Realtor.com.
Landlords are still jacking up rents in cheaper parts of the country, such as the Midwest and the Northeast. Meanwhile, rents are falling in the pricier West and in the South where rents had risen sharply during the pandemic.
“These are still affordable areas,” says Xu. “People are considering moving to these areas for affordable homes. That increased demand pushes prices up.”
Prices rose 2% year over year for studios, to a median of $1,463 in May. The price of one-bedroom units ticked up 0.4%, to $1,628, while two-bedroom units were 0.5% cheaper than they were a year earlier, at $1,923. The larger units had experienced the largest price increases over the past four years, rising 26.7% over that period, as more tenants competed for extra square footage.
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