According to Realtor.com®'s monthly rental report, January marked the 12th consecutive month of slowing rent growth.
Monthly rents were down $80 from their August peak, but still up 2.9 per cent year-over-year, with the median monthly rent in the country's 50 largest metropolitan areas at $1,726.
(Realtor.com surveyed rents for studios, one- and two-bedroom flats, condominiums, townhouses and single-family homes in the 50 largest metros. (Metropolitan areas include major cities and surrounding towns, suburbs and smaller urban areas).
"The big takeaway is that while rent growth is slowing, concerns about affordability continue," said Jiayi Xu, senior economist at Realtor.com.
During the COVID-19 pandemic, tenants have been struggling to cope with price shocks as rental prices have soared.
Many couples and individuals moved out on their own, while others were potential homeowners who were trapped into renting after being overbid or left out of the for-sale market. This has strained the limited supply of rental properties and sent prices skyrocketing.
Oklahoma City has some of the lowest rents, and is the only one of the 50 largest metros where tenants can still find a home for less than $1,000 a month.
The city's median rent is $982. Louisville, Kentucky and Birmingham, Alabama, ranked in the top three most affordable metros with median rents of $1,167 and $1,178 respectively.
However, renters in these lower priced areas of the country shouldn't get too comfortable. The biggest price increases were in cheaper Midwestern and Southern cities, with Indianapolis up 10.5 per cent year-over-year, Birmingham up 8.8 per cent and Columbus, Ohio up 8.3 per cent.
Meanwhile, some of the most popular real estate markets saw the most rent declines during the pandemic. Monthly rents fell by 6.2 per cent in Las Vegas, 3.8 per cent in New Orleans, 3.6 per cent in Sacramento, California, 3.4 per cent in Phoenix and 1.4 per cent in Austin, Texas.
"With high rents across the country, places offering relative affordability tend to be in high demand, which means more competition and these lower prices may not last," Danielle Hale, chief economist at Realtor.com, said in a statement." With fewer homes available for rent in many of these cities compared to previous months, fewer flats are available, meaning prices are likely to rise."
Rents for studios (usually the smallest units) also rose the most. rents rose 3.9 per cent year-on-year in January to a national median of $1,417. Rents for one-bedroom flats rose by 2.8 per cent to $1,609, while rents for two-bedroom flats rose by 2.5 per cent to $1,934 per month.
In some of the most expensive cities in the US, prices may gradually rise as companies order workers back to their offices. This could mean a jump in prices in places like San Jose, California and San Francisco in Silicon Valley. Median rents in these cities are US$3,005 and US$2,809 per month respectively.
"People may be moving from the suburbs or cheaper metros to tech hubs as they return to office duties," Xu said." This will again boost rental demand and raise rental prices."
