Realtor.com® June Rental Report: Rent Prices Continue Downward Trend

Rent for one-bedroom units saw first year-over-year decline since 2020

SANTA CLARA, Calif., July 25, 2023 /PRNewswire/ -- The Realtor.com^®June Rental Report found that relief for renters continues, as rent prices dropped even further, down 1.0% year over year. While the median asking rent in the 50 largest metros increased to $1,745, up by $7 from last month, it was down $31 from its July 2022 peak.

"The downward trend in rent prices continued in June, providing a much-needed respite for renters and an opportunity to regain some control over their housing expenses," said Realtor.com Chief Economist Danielle Hale. "With our midyear forecast update calling for slowing inflation, better-than-expected labor market performance, and an increase in multi-family supply, we're seeing some encouraging signs for renters' budgets as we enter the second half of the year."

June marks the first year-over-year decrease in rent for one-bedroom units since 2020, mirroring the first such drop in rent for two-bedroom units in May.

While continuing rent price declines are helping to improve affordability, it's important to note that rents remain significantly elevated: 24.1% higher than the same time in 2019. Rents for studios, for example, also continue to grow. The median rent of studios was $1,445, up by $14 (1.0%) year-over-year and $229 (18.8%) higher than four years ago.

June 2023 Rental Metrics by Unit Size – National

Western rents drop further as San Jose experiences first decline
Rent in Western metros continues to decline faster than other parts of the country (-3.8% Y/Y). San Jose, the last large western metro to show a decline in rental prices, saw its first year-over-year rent drop in nearly two years (-1.4%). In contrast, rents in northeastern hubs such as New York City (+4.7%) and Boston (+2.5%) continued to climb more quickly. The strong labor market in the Northeast is likely driving demand, although increasing supply may help ease the upward pressure on rent prices. Rents in the Midwest are still climbing (+3.2%), due to greater affordability in the region. Of the Top 10 metros experiencing the most rent growth, half are located in the Midwest. Meanwhile, rents in the South (-1.3%) dropped lower than a year ago.

Youngest metros offer affordability, tech jobs
Affordable rent and job prospects are key factors for young people choosing a place to live. Of the 10 metros with the highest share of young households and young renters (aged 25-34), Oklahoma City ranks as the most affordable, with younger individuals spending only 18.7% of their monthly income on the typical rental during June. This age group, which makes up 30% of employees in the tech sector, according to our estimation from the Current Population Survey, is renting in areas with high tech growth, suggesting that tech jobs hold considerable appeal for young households. Six of the metros with the highest share of young renters also had higher-than-average annual growth in their tech sectors (+0.8%). Nine of the 10 experienced positive growth rates overall, led by Seattle (+3.9%), Orlando, Fla. (+2.8%), and Denver (+2.2%).

Metros with Highest Share of Young Renter Households in June (Aged 25-34)

"The continuing declines in rental prices mark a promising shift for renters after months where many renters spent more than they could afford on housing costs," said Realtor.com^® Economist Jiayi Xu. "We expect to see rental prices continue to show small year-over-year declines through the end of the year."

Rental Data – 50 Largest Metropolitan Areas – June 2023

Methodology 
Rental data as of June 2023 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com^®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com^® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.

With the release of its June rent report, Realtor.com^® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since June 2023 will not be directly comparable with previous releases and Realtor.com^® economics blog posts. However, future data releases, including releases about historical data, will consistently apply the new methodology.

We define young households and young renters as those aged between 25-34 years old. We exclude renters aged below 25 years old to minimize the impact of college renters. To calculate the share of annual income spent on rents for households aged between 25-34, we used the annual median household income data sourced from Claritas. 

We leverage Brookings' definition and define the technology sector as six industries from 2017 North American Industry Classification System (NAICS): Computer and Equipment Manufacturing (3341), Semiconductor and Other Electronic Component Manufacturing (3344), Software Publishers (5112), Data Processing, Hosting, and Related Services (5182), Other Information Services (5191), and Computer System Design and Related Services (5415). With this definition, we calculated the share of tech labor by age using the 2022 Current Population Survey. The compound annual growth rate for the tech sector is calculated based on the number of employees in the technology industry sourced from 2019 and 2021 County Business Patterns data. 

About Realtor.com^®
Realtor.com^® is an open real estate marketplace built for everyone. Realtor.com^® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com^® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com^® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com^®.

Media contact: press@realtor.com

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