Rental Prices in the U.S. May Have Finally Hit a Ceiling, a New Report Says
Could relief finally be on the way for renters?
The rental market has reached dizzying new heights in recent years. And, though prices are holding steady—in 2022, the median rent across the U.S. hit an all-time high of $2,054, and a year later, figure is only $2 shy of the record—there may be some glimmers of light at the end of the tunnel for renters.
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In notoriously expensive Manhattan, the average rent in August was a whopping $4,400, unchanged from the record set in July. However, in terms of the number of new leases in Manhattan, that number plunged by 14 percent from last year to 5,025 during what’s supposed to be peak season, reported Bloomberg. In fact, activity in August ended up being slower than in May and June. In many cases, existing tenants are choosing to stay put and renew their lease rather than risk a record-high rental market.
As a result, landlords are increasingly coming up with clever ways of incentivizing potential new renters. “With vacancies on the rise, some landlords are doling out one-time discounts to attract renters while maintaining high asking rents on paper,” wrote Redfin’s data journalist, Lily Katz, in a new report.
In recent years, bidding wars were one of the factors that drove up rental prices. But luckily for those looking or needing to move, that seems to be changing. In July, only 11 percent of new leases signed in Manhattan involved a bidding war, whereas in 2022, that number was 19 percent.
Rental prices in neighboring boroughs, including Brooklyn and Queens, have also plateaued. The median price in Brooklyn clocked in at $3,950 in July and $3,850 in August, while, in both boroughs, the number of new leases dropped about 40 percent since last year. As more people choose to stay put and more apartments become and stay vacant, landlords may be forced to lower prices or otherwise incentivize prospective tenants.
The news is pretty good for renters in other parts of the country, too. In the West, the median asking rent fell 1.1 percent to $2,469 in August, and in the South, it dipped 0.3 percent to $1,673.
Even though prices are still near their all-time highs, we’re no longer seeing drastic jumps like when the market was surging—at least for now. And, if renters are patient and play their cards right, they just might find a great incentive that encourages them to pack up and move.
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