Supply continues to be a major theme in the U.S. rental-housing market, with Sun Belt markets especially seeing an unprecedented level of new construction delivering in recent quarters. GETTY IMAGES

Austin Business Journal writes, "The national rental-housing market has continued to cool, with differing outcomes based on geography and unit type.

Several markets in the South posted significant year-over-year declines in apartment rental rates as of April, according to a new analysis. Those declines were led by Nashville, Tennessee, and Austin, Texas, the latter of which has seen an 8.3% annual drop in asking rents and an 11.5% drop since peaking September 2022.

And while most rental markets similarly have come off an August or September 2022 peak, a few locations are bucking the trend — including Indianapolis, Milwaukee and Minneapolis, which all experienced record-high rents in April, found.

Danielle Hale, chief economist at, said while the Midwest has seen some buildup in supply in recent years, it hasn't occurred there as much as it has in the South.

"Rents [in Midwestern markets] continue to be affordable, even after run-ups, which makes them attractive," Hale said. "Even though they are at new highs, and affordability is stretched to where it has been, they continue to be relatively affordable."

Supply continues to be a major theme in the U.S. rental-housing market, with Sun Belt markets especially seeing an unprecedented level of new construction delivering in recent quarters.

In the first three months of 2024, there were 135,652 apartment units completed nationwide, according to RealPage Inc. For the 12-month period that ended in March, there were 479,367 multifamily units added nationally, up 10% from what was added across all of 2023.

Among the top 50 metro areas tracked by, the markets that've seen a decline of 5% or more year-over-year in asking rents include Atlanta; Austin; Baltimore; Charlotte, North Carolina; Nashville, Tennessee; Orlando, Florida; Raleigh, North Carolina and San Antonio.

Asking rents declined across all markets by 0.7%, a slower pace than the 1.1% annual decline seen the month prior.

While the national rental market has been in a period of decline for nine consecutive months by's measurement, median rent in April nationally was still just $33 less (or, 1.9%) than the market's peak in August 2022. It's also still $316 higher (22.5%) than the same time in 2019. That underscores how significantly rents have grown since the onset of the Covid-19 pandemic.

Hale said that with the exception of San Francisco, all markets the company tracks are up compared to pre-pandemic rents.

"When it comes to affordability, even if rents are maybe acclimating to prior trends in these markets, it’s certainly a welcome relief for someone looking for a rental right now," she said, adding the data measures the price of available units on the market. That means renters who've been in their units for some time may still be seeing rent increases at renewal time, even if advertised rents are lower than they were at their peak.

Single-family rentals see rent growth amid challenging for-sale market

The single-family rental market continues to see annual growth, although a segment within that category is starting to be impacted by the wave of new apartments.

U.S. single-family rents grew 3.4% on an annual basis in March, the most recent month available, according to CoreLogic Inc. research. But attached units, such as for-rent townhouses and condos, actually posted a 0.6% year-over-year decline.

That's likely because attached rental housing is the SFR rental product most likely to compete with the more traditional apartment market, where new units with lofty concessions could be compelling to renters, said Molly Boesel, principal economist at CoreLogic.

"With so many multifamily apartment buildings coming online, that supply has really dampened the rents [in some markets], even bringing them down as those apartments compete with the attached segment and some of the detached rental units," she said.

Boesel referenced Austin as an example, where SFR rents declined 3.5% annually in March. That's still significantly less than the 8.3% annual decline posted in Austin within the traditional rental market in April, as recorded by

Seattle took the top spot in CoreLogic's research for annual single-family rental rate increase, growing by 6.3% year over year in March. Seattle was followed by major East Coast employment centers New York, at 5.3%, and Boston, at 5.2%.

Boesel said it's likely the single-family rental market will continue to look similar to how it has over the past couple of months, even with so many apartment completions. In a stable market, the SFR market grows 2% to 4% annually, she said. It's possible the national market could end the year closer to 2% when accounting for currently soft markets like Austin.

Challenges in the for-sale housing market will continue to bolster the single-family rental market overall.

"It's really unaffordable to purchase a home," Boesel said. "If homes are unaffordable to purchase, the next best property type would be a detached single-family rental.""


Source: Austin Business Journal

Written by: Ashley Fahey

Published: May 22, 2024


Posted by Grossman & Jones Group on


Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.