The rental market has been on fire in recent years, with average rents soaring from $1,500 to over $2,000 per month between early 2021 and late 2022. However, recent data from Zillow reveals a steady decline in rents since October, indicating that renters may finally be gaining the upper hand.
The national average rent has dipped to $1,976, and annual growth rates have dropped by 10 percentage points. This trend is attributed to an increase in housing supply and easing economic challenges, such as inflation and supply chain issues. The US is set to gain 600,000 new apartments this year, with 563,000 multifamily building permits issued in January alone.
Built-for-rent communities are also gaining popularity, with single-family built-for-rent construction up 33% in 2022. The growing supply of rental homes is expected to further reduce rental rates, making it easier for renters to find quality homes and negotiate better deals.
Though not all markets will see the same trends, experts generally predict that the rental market will continue to shift in favor of renters. However, to improve housing affordability, the US must address the supply-demand imbalance and reduce barriers to apartment construction at all levels of government.
