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Rents in the U.S. are falling as major cities in the Sun Belt continue to add more affordable housing options, a new report shows.
According to Realtor.comAccording to the October 2024 Rent Report, the average asking rent in the 50 largest metros was $1,720, down $23 from September.
Despite October marking the 15th consecutive month of rent declines, the decline was a modest $40 lower than August 2022’s peak rents.
The report notes that the average rent is still $272 higher than the same pre-pandemic period in 2019, but that this is on par with overall consumer price inflation.
According to Realtor.com economist Jiayi Xu, an increase in the number of homes for rent is the key to falling rents.
“Regionally, all four areas saw a significant increase in multifamily housing completions in 2024, driven by an increase in new starts compared to previous years,” said Xu.
It’s an especially good time to be a renter in Sun Belt cities, where monthly costs are dropping the most.
Cities across the region have built a large number of apartments since the pandemic, meaning supply now exceeds demand and it’s a good time for residents to strike a deal.
“The faster growth in the number of rental properties completed in the South has increased rental supply and depressed the typical rental price of properties available in October compared to a year ago,” said Xu.
‘The South witnessed the largest increase in new completions between January and September 2024, with a year-on-year growth of 49.1 percent, followed by the Midwest (44.9 percent), West (23.9 percent) and Northeast (7.4 percent).’
These are the major cities where rents have fallen the most:
Denver, Colorado
Rents for studio to two-bedroom homes fell 5.6 percent from the year before in the Mile High City. According to Realtor.com, the average rent for these properties was $1,836 in October.
An average of 10,000 new apartments are built in Denver every year. In the mountainous city, this statue was last built in the 1970s, when migration to the state reached a record high.
Rents for studio to two-bedroom homes fell 5.6 percent from the year before in the Mile High City
The region averaged 5,000 new apartments per year until 2011, when the average shot up to an astonishing 10,000 per year. The Denver Post reported.
In the past 12 months, developers added 21,158 new apartments – double the pace of the past decade and equal to about 5 percent of all existing apartments built in the past 100 years, Cary Bruteig, author of the quarterly report, told The Denver Post.
Memphis, Tenn
Rents fell 5.4 percent from the year before for studio to two-bedroom homes in Memphis. The average rent for these properties was $1,204 in October.
The typical national monthly rent of $1,700 gets you a 1,996-square-foot apartment in Memphis, but only 211 square feet in one part of Manhattan, according to a report from RentCafe. That is almost ten times smaller.
Rents fell 5.4 percent year-over-year for studio to two-bedroom homes in Memphis
Of the top ten zip codes where renters can get the most space for their money, four are in Memphis.
In February, Realtor.com reported that the birthplace of rock ‘n’ roll is one of the top metropolitan areas in the country where it’s cheaper to rent than to buy real estate.
Nashville, Tenn
In Music City, rents fell 5.2 percent from the year before for homes ranging from studios to two-bedrooms. In October, the average rent for these properties was $1,556.
In Music City, rent fell 5.2 percent from the previous year for homes ranging from studios to two bedrooms
A drop in rental prices is a much-needed relief for the millions of people who have flocked to the area in recent years.
In 2023, an estimated 86 people per day moved to the Nashville metro area, bringing the population to 2.1 million, according to United States Census Bureau figures.
Dallas, Texas
The average rent for studios in two-bedroom homes in Dallas was $1,462 in October. That price fell by 4.3 percent compared to the previous year.
Texas has built a large number of apartments since the pandemic, meaning supply now exceeds demand and it’s a good time for residents to make a deal.
The average rent for studios in two-bedroom homes in Dallas was $1,462 in October
Austin, Texas
Rents for homes ranging from studios to two bedrooms fell 4.2 percent from the year before in Austin. The average price in October was $1,495.
Home prices in Austin soared during the pandemic as the sunny climate, expansive state parks and relative affordability attracted an influx of buyers.
According to Realtor.com, the gap between renting and buying was widest in Austin, Texas.
Rents for homes ranging from studios to two bedrooms fell 4.2 percent from the year before in Austin
Chicago, Ill
In the Windy City, rents for studio to two-bedroom homes fell 4.1 percent from the year before. The average rent for these homes was $1,780 in October.
This is good news for renters, as the city was previously ranked as one of the best metropolises in the country, where it was cheaper to buy a house than to rent.
In the Windy City, rents for studio to two-bedroom homes fell 4.1 percent from the year before
San Antonio, Texas
The average rent for studio to two-bedroom homes in San Antonio was $1,250 in October. That price fell 4.1 percent compared to the year before.
San Antonio has long been known as one of the most impoverished big cities in America, and its leaders have been trying to bring the city back from ruin for decades.
The average rent for studio to two-bedroom homes in San Antonio was $1,250 in October
These efforts largely involve gentrification: efforts to attract large corporations to improve the job market and initiatives to redistribute city tax dollars to Texas’ poorest neighborhoods.
Phoenix, Ariz
Rents for studio and two-bedroom homes in Arizona’s state capital fell 4.5 percent from the year before. The average rent was $1,512 in October.
Rents for studio and two-bedroom homes in Arizona’s state capital fell 4.5 percent from the year before
Charlotte, North Carolina
In Charlotte, the average rent for studio to two-bedroom homes was $1,520 in October. Rent fell by 3.8 percent compared to the previous year.
Zillow data shows that 53 percent of rental properties in Charlotte are offering concessions, such as free weeks of rent, to lure people in.
In Charlotte, the average rent for studio to two-bedroom homes was $1,520 in October
“Now is a good time for renters to find a deal, with more new apartments coming onto the market than at any time in decades,” said Skylar Olsen, Zillow’s chief economist.
‘Rents are still rising, but it’s a far cry from the steep rent increases of two or three years ago, and tenants will find sweeties in more than half of rental properties in some places.
‘A slowing labor market and lower mortgage rates could mean falling rents if current trends continue.’