Rents Are Dropping for the First Time Since the Pandemic

Renters can breathe a sigh of relief, as competition for apartments is about to ease. For the first time since the pandemic began, rents are dropping -- a glimmer of good news for those trying to make ends meet.

Rental prices fell 0.5% year over year in May 2021 to a median of $1,739 a month in the 50 largest metropolitan areas, according to a recent report by Realtor.com®,. While this may seem like a small decrease, it's a significant change from the price spikes seen in 2020. So, as a tenant, what does this mean for you? Let's take a closer look.

More options for renters

The competition for apartments is about to become less intense. Rather than face the daunting costs of moving, more people are opting to stay put. Additionally, the rental market is about to get a major boost, with new units becoming available in the next couple of years.

This means more options for renters. If supply outpaces demand, landlords will most likely have to lower rents to attract tenants. Overall, the decrease in rental prices is a positive sign that the rental market is becoming more balanced and affordable.

The downtrend is expected to continue

What can renters expect in the coming months? Realtor.com® predicts that rents will continue to decrease by 0.9% this year compared to 2022. While it may not be a substantial decrease, it is certainly a step in the right direction.

This trend is a welcome change for many tenants who struggled to afford skyrocketing rental prices in the midst of the pandemic. With home prices and mortgages also on the rise, many were left with no choice but to continue renting. However, the current drop in rental prices provides a glimmer of hope for those looking to save money and potentially transition to homeownership. Tenants can take advantage of this opportunity to find a more affordable place to live while also considering their long-term housing goals.

Rents are still rising in certain cities

While rents may be decreasing on a national scale, certain regions are experiencing unwelcome increases for tenants.

In more affordable parts of the country, such as the Midwest and Northeast, landlords are still raising rents. Conversely, the Western and Southern regions, where rents had surged during the pandemic, are now seeing a decline in prices.

The city with the most significant increase in rents is Columbus, OH, with a staggering 9.3% year-over-year growth in May. Following closely behind are St. Louis, MO, at 7.7%, Cincinnati, OH, at 7.5%, Indianapolis, IN, at 7.3%, and Louisville, KY, at 7.2%.

On the other hand, Las Vegas, NV, experienced the largest rent drop at a rate of -6% year over year. Close behind are Riverside, CA, at -5.9%, Phoenix, AZ, at -5.7%, Austin, TX, at -5.6%, and both Tampa, FL, and San Francisco, CA, at -4%.

What this means for you

When searching for a rental property, it's crucial to find the best place that fits your needs and budget. You may begin your search by researching online or seeking recommendations from friends and family members.

Once you have a list of potential places, arrange a visit to each property and take note of its condition and amenities. Ask questions about the lease agreement, security deposits, and policies concerning pets and visitors.

Also, consider the location of the property and its proximity to public transportation, grocery stores, and restaurants. By being thorough in your search, you will find the best place to rent that meets your standards and provides the perfect home for you.

The recent drop in rental prices is a sign of the shifting rental market and excellent news for tenants struggling with their personal finances. Despite the drop in rental prices, renting still comes at a high cost for many tenants. It's important to do your research and find the best options for your housing needs.