- Rent growth is finally showing signs of slowing after years of increases, experts say
- In ten cities, prices have fallen by as much as 15% in the past year
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The US rental market is finally showing signs of cooling as the average monthly cost of housing fell in October.
The average price of a one-bedroom apartment in the US is now $1,505, down 0.4 percent from September, figures from the rental platform show Zumper show.
A two-bedroom fixture costs Americans $1,862 per month, which represents a decrease of 0.2 percent. Although prices were still above 2022 levels, experts said rents would drop outright by winter.
But some cities are already seeing dramatic price drops. Augusta, Georgia, has seen rents drop 15.2 percent, bringing the average monthly payment to $840.
It was followed by Lincoln, NE, where rents fell 14.4 percent to $770 per month. St. Louis, MO, Fresno, CA and Greensboro, NC rounded out the top five places where costs fell the steepest since 2022.
The US rental market is finally showing signs of cooling as the average monthly cost of housing fell in October
The trend is being driven by areas that have attracted an influx of new residents during the pandemic but are now seeing those same people move out.
Researchers added that the economic turmoil was also keeping Americans from moving home.
Zumper CEO Anthemos Georgiades told DailyMail.com: ‘Renters hate uncertainty, and many are delaying their move until they have more confidence in the economy.
‘At the same time, new supply is coming online in many markets, which is welcome news for tenants with costs, as it increases competition and helps keep prices down.’
Zumper also noted that in times of economic uncertainty, new family compositions tend to shrink. Instead, potential renters cling to multi-generational homes, along with their parents and grandparents.
Across the board, the report found a “sunbelt slowdown,” as rents fell fastest in so-called pandemic Zoomtowns like Miami, Phoenix and Austin.
Augusta, Georgia, has seen rents drop 15.2 percent, bringing the average monthly payment to $840. Pictured: An aerial view of downtown Augusta
St. Louis saw rents drop 13 percent to $870 per month. Pictured: The gateway to the West Arch in downtown St. Louis
Five of the seven Texas cities in the studies had seen a month-over-month decline in rental costs.
Georgiades said: “Phoenix in particular is poised for even more drastic price drops. At the beginning of the pandemic, many real estate investors moved into the area and are now starting to sell those rental properties.”
Falling rents are a financial headache for property buyers who bought during the 2020 and 2021 housing boom.
It comes after experts warned America was becoming a nation of ‘accidental landlords’ as rising mortgage rates made homeowners unwilling to give up their cheap deals.
Interest rates are now closer to 8 percent, according to the latest figures from Freddie Mac and the Mortgage Bankers Association (MBA).
But most homeowners have benefited from years of rock-bottom interest rates. Someone buying during the pandemic would have held between 2 and 3 percent.
Determined to hold on to their low rates – but in need of more space – some are choosing to rent out their homes rather than sell.
Real estate agent Adie Kriegstein, founder of the NYC Experience team at Compass, told Dailymail.com at the time: ‘There is so much uncertainty, it makes people very wary. I have a client on my books who recently decided to leave town, so he rented out his apartment here while he pays to rent somewhere else. It will definitely become a trend.’