January saw median rents drop for the sixth straight month, with year-over-year prices down -0.3%, according to Realtor.com’s January 2024 Rental Report. Renters are experiencing much-needed relief, although prices are still 18.3% higher than pre-COVID. There is strong demand for rental units, and not nearly enough of them accessible in markets across the country.

The median asking rent for 0-2 bedroom units in the 50 largest metropolitan areas in the country decreased to $1,712, which is a decline of $5 from January 2023—and $46 lower than its peak in August 2022.

Drilling down further, the Avail 2023 Annual Rental Market Report (part of Realtor.com) unveiled that landlords looking to raise rent prices in the next 12 months declined in recent quarters.

Key takeaways:
The largest rent declines (-1%) were in studio apartments, as asking rent fell to $1,434, which is down -3.8% from its October 2022 peak. This is still 11.9% higher compared to four years ago.

Looking at two-bedroom apartments specifically, units dropped to $1,892, a decline of -0.6%, while larger units saw the most growth in rent prices in the span of the past four years—a $321 increase, or 20.4%. One-bedroom unit asking rents also increased by 0.1% year-over-year to $1,591.

In January, the median rent in the West dropped by -0.3% from a year ago, led by declines in areas including:

• Phoenix, Arizona -4%
• Riverside, California -2.6%
• Las Vegas, Nevada -1.8%

Rents showed year-over-year increases after eight consecutive months of decline in the following areas:

• Los Angeles, California 0.2%
• Seattle, Washington 1.3%

In Northeastern metros, rents are rising faster in:

• New York, New York 2.3%
• Boston, Massachusetts 2.7%

Asking rents in the Midwest increased by 0.2% in January, led by these cities:

• Chicago, Illinois 4.2%
• Indianapolis, Indiana 3.5%
• Kansas City, Missouri 3.1%

Median asking rent dropped by 1.2% in the South, led by year-over-year declines in:

• Memphis, Tennessee -5.5%
• Atlanta, Georgia -3.8%
• Austin, Texas -3.6%
• St. Louis, Missouri -3.6%
• Miami, Florida -3.4%

What the experts say:
“Rental prices are declining, especially in places where new units are entering the market, but there’s still plenty of demand driven by the large population of renters, including potential first-time homebuyers who remain on the sidelines for now,” said Danielle Hale, chief economist at realtor.com®. “Looking forward, realtor.com® anticipates the rental market to decline only slightly in 2024, as an increase in the supply of new units is balanced out by continued enthusiasm for renting as a more affordable alternative to purchasing.”

For the full report, click here.

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