US Rental Market Cools Down Following Several Months of Price Increases
The U.S. rental market has been slowing down in recent months. According to a recent report from the Joint Center for Housing Studies of Harvard University, rental price growth has dipped from the high levels seen during the pandemic as overheated markets have cooled and more inventory has become available. In Q2 2024, national rents rose by just 0.2%, a significant drop from the 15.3% increase in early 2022. However, despite the recent slowdown, rents are still 20.9% higher than they were five years ago.
This national trend has played out differently across the country, due to differences in demand and supply factors. For example, rents have continued to grow most in the Northeast and Midwest by 2.4 and 2.7 percent respectively, down from 12.0 and 10.6 percent in 2022 (Figure 2). Markets in the West have also softened significantly in recent months, with rents remaining unchanged on average on an annual basis (down from 15.1 percent growth two years prior).
And while rent growth has moderated in much of the country, rents have outright declined in some places. In the South, rents declined annually by 1.4 percent in the second quarter of 2024, a significant change from the 16.6 percent growth recorded two years before.