Rental prices in the 50 largest U.S. metros dropped by 0.6% in August, with the median rent reaching $1,752 per month, according to Realtor.com. This marks the fourth consecutive month of year-over-year rent declines for studios and one- and two-bedroom properties. While rents are dropping, they remain above pre-pandemic levels, with costs being 23.7% higher in August than they were four years ago.
In August, rental prices fell the most in areas that had experienced significant surges during the pandemic, such as Austin, Texas, Tampa, Fla., and Phoenix, which saw year-over-year declines of -8%, -5.5%, and -4.5%, respectively.
“Sellers got used to the fair value of homes being inflated, so they were not going to sell for less than [what folks] got during the frenzy,” says Stephanie Douglass, co-founder of Open House in Austin, a real estate brokerage that works with first-time homebuyers. “Instead of lowering prices, sellers [have been] renting [out their] properties, which flooded the rental market.”
The extra inventory of rental properties helped to bring down prices. Size also played a factor.
Prices for two-bedroom units, the more expensive rentals, dipped the most. They decreased 0.7% year over year in August, to a median of $1,948 a month.