Rent is now 0.7 percent lower for one-bedroom rentals nationwide than it was a year ago, but not in all markets, new report shows.
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For the second time in three years, the monthly cost of a one-bedroom rental was lower than it was a year ago, according to a new report released Tuesday that showed that the era of unprecedented rent increases is over for much of the country.
The national price of a one-bedroom rental fell 0.7 percent in February. It ticked up 0.7 percent for two-bedroom rentals, according to the new report from Zumper. That increase is below the typical U.S. annual rent increase.
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The report is only the latest to find that markets that added the most supply are seeing rent fall fastest, typically in the Sun Belt and across the West, while markets in the Midwest and Northeast that didn’t add as much supply are seeing rent continue to rise.
“With record apartment supply hitting the U.S. market, renters have more options to choose from so property owners are even more incentivized to retain tenants since units may sit empty for longer in current conditions,” Zumper CEO Anthemos Georgiades said. “If a renter wants to avoid the hassle of moving or wants to wait out the uncertainty of the current economy, staying in place will likely mean a minimal rent increase this year, if any.”
While it’s typically common for tenants to face rent increases when renewing their leases, the added supply in many markets means property managers have less leverage to increase the cost of rent upon renewal, Zumper said.
February was the fifth consecutive month of flat or negative monthly changes in rent nationwide, according to the Zumper index.
A one-bedroom rental cost $1,482 in February, while a two-bedroom apartment cost $1,837, Zumper said.
Not every market is experiencing a slowdown, however. New York City, Chicago and Cleveland — cities that added relatively little supply compared to demand — saw rent rise about 20 percent year-over-year, Zumper said.
Meanwhile, Austin and Dallas, which have added a significant amount of apartment supply in recent years, saw rent fall 10 percent year-over-year.