Rent prices continued up in July for the sixth month in a row, Apartment List says in its August report.
However, the Apartment List research team warns that rent growth is modest.
“While month-over-month rent growth remains positive, it is decelerating. Prices increased just 0.2% in July and today the nationwide median rent stands at $1,414. It is very possible that rent growth will turn flat or negative in August, and stay there for the remainder of the year,” researchers write.
Rents are up 0.2% month-over-month, down 0.8% year-over-year
“Rent growth follows a seasonal pattern – prices tend to go up during the spring and summer and dip during the fall and winter. Today we are nearing the end of that busy summer season, but this year’s trend is not bringing elevated rent growth. The nationwide median rent has increased for six straight months; however, the pace of that positive rent growth is slowing, with rents up 0.2 percent in July, compared to 0.4 in June and 0.6 percent in May,” the report says.
While 71 of the nation’s 100 largest cities saw rents go up in May, on a year-over-year basis, rent growth is positive for only 52 of these cities.
The report says seasonality has shifted slightly in the past two years. In both 2023 and 2024, peak monthly rent growth occurred in March, two months earlier than in pre-pandemic years. Since March, rent growth has slowly decelerated, reflecting the sluggish, supply-rich rental market that has persisted since late-2022.
Vacancies continue to increase
The research staff writes that through July, “our vacancy index sits at 6.7 percent, the highest reading since August 2020. And there’s good reason to expect that it could rise even further during the remainder of the year.
Despite a recent slowdown in new permits being issued and new construction projects breaking ground, the number of multifamily units under construction remains near record levels. 2023 saw the most new apartments complete construction in more than 30 years, and an even greater number of new units are expected to come on the market this year. This means that renters should have more available options than they have in some time, especially in the Sun Belt markets where construction activity has been strongest.”