Housing affordability remains a pressing concern in the United States, with rental rates steadily rising year after year. However, there may be some relief on the horizon, as recent data indicates that average rental prices in the US have decreased for the first time in nearly three years.
The US median rent in May fell from May 2022, for the first time a decline has been recorded in 3 years. That's certainly good news for renters as economic hardship bites harder. According to a Realtor.com report released Monday, rent in the US witnessed an unexpected decline and is now predicted to go down as the year goes by.
The national median asking rent was $1,739, which was quite different from what was seen in May 2022. Compared to data gathered last year, the rent decline was about 0.5%.
Realtor.com started tracking dates related to rents from 2020. And since then, they have consistently witnessed an increase in rent prices. So it was quite surprising to see rent in the United States decrease despite the economic depreciation witnessed worldwide.
Danielle Hale, Realtor.com's chief economist, said in a statement that the new figures show that rental inflation might be a thing of the past in the United States. However, Danielle Hale quickly pointed out that this rent decline in the United States might not appear in the official figures until next year.
"This is yet another sign that rental-driven inflation is likely behind us, even though we may not see this trend in official measures until next year. Although still modest, a rent decline combined with cooling inflation and a still-strong job market is welcome news for households," Danielle Hale said.
Rents Still High Compared to 2019
Since Realtor.com started compiling its data in 2020, the official rental figures for 2019 still show that the rent price is still high compared to 2019. Although this year's rent price is down from July 2022's peak of $1,777, it is still 25% high compared to 2019.
During and after Covid-19, rents increased steadily, especially after the pandemic cooled. Since many were starting their lives afresh at work and school, moving to other states and locations made rent prices spike. Coupled with economic decline, rents went up very fast.
Realtor.com's figures stated that despite the decline in US average rent prices, those who haven't moved for a long time might still find the prices radically high. This means that renters that haven't moved around since 2019 might find the new rent prices in the market incredibly high.
"For renters who maybe have stayed put over the past couple of years and haven't moved, they might not be at the market rent level. If they were to move this year, even though market rents are declining, they might see a higher rent payment," Hale said while speaking to CNN.
Additionally, the decline only applies to the US average rent prices as people might see the rent price vary in different US states. The Midwest and Northeast are still seeing the price of rent climb higher, whereas the West and the South recorded year-over-year rent declines in May of 3% and 0.7%, respectively.