In November, the national rents index fell by 1 percent, marking the third consecutive month-over-month decline and the biggest percentage decline since 2017, according to Apartment List’s December report.
According to the report, rents are expected to drop in the winter as well.
“The timing of the recent cooldown in the rental market is consistent with the typical seasonal trend, but its magnitude has been notably sharper than what we’ve seen in the past, suggesting that the recent swing to falling rents is reflective of a broader shift in market conditions beyond seasonality alone,” the research team writes in the report.
Rent growth has slowed significantly since the beginning of the year and is approaching pre-pandemic levels.
November saw Seattle’s biggest rent drop
Apartment List measured rents in 93 of the nation’s 100 largest cities.
Seattle experienced the sharpest drop in prices among large metros in November, with 2.6 percent decline.
“And over a longer horizon, we are continuing to see an ongoing cooldown in many of the recently booming Sun Belt markets. Las Vegas, Phoenix, Jacksonville (Fla.), and Riverside (Calif.) have all seen rent growth of 30 percent or more since March 2020, but none of these metros has seen rents increase by more than 1 percent over the past twelve months,” the report says.
“This year’s dip has so far been sharper than what we typically see. Prices have now fallen by a total of 2.2 percent since August, which is the sharpest three-month decline in the history of our index.
“The recent dip suggests that we may be entering a new phase of the rental-market rollercoaster, with changing economic conditions now driving a cooldown rental demand just as supply constraints are easing. It’s likely that rents will decline further in the months ahead, as rental market activity continues to slow during the winter months,” the research team writes.
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Vacancy rates continue to rise
As rent growth has slowed in recent months, the vacancy rate has been easing at a faster rate.
There was only a 0.2 percentage point increase in the vacancy index from April to August, going up from 5.1 percent to 5.3 percent. It has increased by 0.6 percentage points from August through November, reaching 5.7 percent in December.
Metro Denver home sales tumbled again in November despite lower mortgage rates
Lower mortgage rates last month weren’t enough to lift the big chill that has settled over the metro Denver housing market. Sales were down 18.3% and more sellers are pulling their listings.
Metro Denver home and condo sales continued to slow and single-family home prices also dropped last month despite the relief buyers received in the form of lower mortgage rates, according to a monthly update from the Denver Metro Association of Realtors on Monday.
The number of sales in November fell to 2,877, an 18.3% decline from October and a 48.2% decline from last year. Despite fewer sales, the number of active listings fell 14.2% on a monthly basis to 6,253, as sellers pulled back ahead of the holidays.
The median price for a single-family home that sold was $615,000, a 0.92% decrease from October and a 2.5% gain over the past year. The median price of a condo or townhome rose 1.23% during the month to $410,000, a 5.13% gain from November 2021.
Conclusion
The report summarizes that the recent rent declines are “still quite modest in comparison to the skyrocketing growth of last year, and the national median rent is still 23 percent higher than it was in January 2021.”
