Tenants hoping to catch a break on their rents may not be successful anytime soon.
Rent prices continued their march up for the fourth consecutive month in June since bottoming out in February, according to a report from Rent.com
Prices from May to June grew by more than 1.7% and have increased by more than 3% since April. Over the last year, only March saw greater monthly growth at 2% percent. Monthly price changes have averaged 0.89% growth since February’s low.
The good news: prices remain below last summer’s peak.
The national median rent price is now $2,029, 1.8% less than in August 2022 when rents reached $2,053. By February 2023, rents had declined 6% from the previous high of $1,936. June’s price represents a 5% increase from February and the most expensive price registered since August 2022. Over a two-year period, prices have risen by more than 15% percent nationally, adding over $275 to monthly rent bills.
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“Rents do still continue to climb essentially, but the price growth is more moderate than it has been in the past,” says Jon Leckie of Rent.com told USA TODAY. “And that’s going to be really good news for renters going forward.”
The reason for the slower pace of growth is attributable to broad trends across the rental industry, including new inventory. However, with the typical high season for rentals now in full swing, prices are rising again but slower than normal.
Where are rents going up?
At the state level, rents decreased on a yearly basis in 33% of markets in June. Price declines continue to be driven by markets in the West where region-wide rents dropped by -0.3% year over year in June. The West was again the only region to show prices declines as has been the trend throughout 2023. In contrast, the South grew by a moderate 0.8%, while the largest gains were in the Northeast where prices are now 4% more expensive than they were in June 2022, and in Midwest, where rents increased by 3.7% percent.
On a monthly basis, rents grew in 57% percent of markets as the high season for leasing kicks into gear.
Among the 10 states with the highest year-over-year rent growth, all experienced above 6% increases.
- South Dakota (+27%)
- Mississippi (+27%)
- Iowa (+16%)
- North Dakota (+12%)
- New York (+12%)
- Arkansas (+11%)
- Nebraska (+8%)
- New Hampshire (+7%)
- Wisconsin (+7%)
- Indiana (+7%)
Where are rents going down?
Overall declines in the West were led by Washington, Idaho, Arizona, and Nevada, four of five states to experience the largest rent declines in June. Prices in Washington and Idaho fell by more than 6%, while Arizona decreased by just under 5% and Nevada by slightly more than 3% year over year. Oregon, another Western state, declined by 3%.
Rents in the Southern states of Texas and Oklahoma declined by roughly 4% and 2.5% respectively. In total,14 states saw yearly rent declines in June.
The 10 states that saw the largest yearly decreases
- Washington (-7%)
- Idaho (-6%)
- Arizona (-5%)
- Texas (-4%)
- Nevada (-3%)
- Maryland (-3%)
- Oregon (-3%)
- Oklahoma (-2.5%)
- Pennsylvania (-2%)
- Illinois (-2%)
Metro-area rent trends: Kansas City rents see huge gains, Austin rents decline
Among the 50 most populous metropolitan areas, California dominated the list of largest gainers in June, despite regional trends in the West. California takes three spots among the top 10 biggest yearly increases lead by San Jose, which rose by nearly 9.5%. Rents in the Los Angeles and San Diego metros also grew by more than 5% each.
“During the pandemic, many Californians moved to the Mountain West areas and now we’re starting to see the reversal of that,” says Leckie.
Now, as companies begin mandating workers to return to the office, cities in California that are tech hubs are beginning to see increased demand.
The Kansas City, Missouri, metro area saw the most significant yearly increase in June at 16%. Other Midwestern metros, including Columbus and Minneapolis, saw increases of 10% and 5% respectively.
These metro areas experienced the biggest rent increases
- Kansas City, Missouri (16%)
- Providence-Warwick, RI-MA (+11%)
- Minneapolis-St. Paul-Bloomington, MN-WI (+10%)
- San Jose-Sunnyvale-Santa Clara, CA (+9%)
- Charlotte-Concord-Gastonia, NC-SC (+7%)
- Nashville-Davidson–Murfreesboro–Franklin, TN (+7%)
- Hartford-East Hartford-Middletown, CT (+6%)
- San Diego-Chula Vista-Carlsbad, CA (+6%)
- Columbus, OH (+5%)
- Los Angeles-Long Beach-Anaheim, CA (+5%)
Five metros in the South were among the largest losers. After recent double-digit increases, Austin, Texas saw significant rent declines at -14%, along with New Orleans at -12%, and Oklahoma City at -11.5% percent. In total, 26 metros saw yearly declines, with 15 metros registering declines greater than 3%.
These metro areas saw the biggest rent declines
- Cincinnati, OH-KY-IN (-15%)
- Austin-Round Rock-Georgetown, TX (-14%)
- Seattle-Tacoma-Bellevue, WA (-14%)
- New Orleans-Metairie, LA (-12%)
- Oklahoma City, OK (-12%)
- Las Vegas-Henderson-Paradise, NV (-11%)
- Portland-Vancouver-Hillsboro, OR-WA (-9%)
- Houston-The Woodlands-Sugar Land, TX (-7%)
- Birmingham-Hoover, AL (-6%)
- Chicago-Naperville-Elgin, IL-IN-WI (-5%)
