America’s red-hot rental market is finally showing signs of cooling as the average monthly cost of properties fell in October.
The median price of a one-bedroom apartment in the US is now $1,505, down by 0.4 percent from September, figures from rental platform Zumper show.
A two-bedroom fixture costs Americans $1,862 per month, marking a decrease of 0.2 percent. Though the prices were still above 2022 levels, experts said rents would be falling outright by the winter.
But some cities are already seeing dramatic price drops. Augusta, GA, has seen rents fall by 15.2 percent taking the average monthly charge to $840.
It was followed by Lincoln, NE, which saw rents drop 14.4 percent to $770 per month. St.Louis, MO, Fresno, CA and Greensboro, NC, rounded out the top five places where costs had fallen steepest since 2022.
America’s red-hot rental market is finally showing signs of cooling as the average monthly cost of properties fell in October
The trend is being driven by areas which attracted an influx of new residents during the pandemic but are now seeing those same people move out.
Researchers added that economic turmoil was also putting Americans off moving home.
Zumper CEO Anthemos Georgiades told AlertContent.com: ‘Renters hate uncertainty, and many are putting off moves until they’re more confident in the economy.
‘At the same time, new supply is coming online in many markets—which is welcome news for cost-burdened renters, since it increases competition and helps push prices down.’
Zumper also noted that in times of economic uncertainty new household formations tend to shrink. In their place, would-be renters cling to multigenerational homes with their parents and grandparents.
Across the board, the report observed a ‘sunbelt slowdown’ as rents declined fastest in so-called pandemic Zoomtowns like Miami, Phoenix and Austin.
Augusta, GA, has seen rents fall by 15.2 percent taking the average monthly charge to $840. Pictured: an aerial view of Downtown Augusta
St Louis saw rents drop by 13 percent to $870 per month. Pictured: The Gateway to the West Arch in downtown St Louis
Five of the seven Texas cities in the studies had seen a month-on-month decline in rental costs.
Georgiades said: ‘Phoenix, in particular, is poised for even more drastic price decreases. Many real estate investors swept into the area at the beginning of the pandemic and are now beginning to offload those rental homes.’
Declining rents are a financial headache for real estate buyers who bought during a housing boom in 2020 and 2021.
It comes after experts warned America was becoming a country of ‘accidental landlords’ as soaring mortgage rates left homeowners unwilling to give up their cheap deals.
Interest rates are now edging closer to 8 percent, according to the latest figures from Freddie Mac and the Mortgage Bankers Association (MBA).
But most homeowners have benefitted from years of rock bottom rates. Somebody buying during the pandemic would have locked in at a rate of between 2 and 3 percent.
Determined to cling onto their low rates – but in need of more space – some are opting to rent out their homes instead of sell.
Realtor Adie Kriegstein, who founded the NYC Experience Team at Compass, told AlertContent.com at the time: ‘There is so much uncertainty, it’s making people very wary. I have one client on my books who recently decided to move out of the city so rented out his apartment here while he pays to rent somewhere else. It’s definitely becoming a trend.’