SEATTLE — Redfin, the residential real estate brokerage giant, has reported that the national median asking rent in June is $2,016 per month, a 14.1 percent increase year-over-year. The Seattle-based company analyzed data from 20,000 separate multifamily and single-family properties from its RentPath platform across the top 50 U.S. metro areas.
The June figure is a slight increase from May at 0.7 percent, which represents the smallest month-over-month gain since the start of the year. The median asking rate is also the smallest annual increase since October 2021.
Daryl Fairweather, Redfin’s chief economist, says while still elevated, the current slowdown in rent growth could be anticipatory on the part of landlords in reaction to overall inflation. (The Consumer Price Index saw its biggest annual gain since 1981 in May, according to the U.S. Bureau of Labor Statistics).
“Rent growth is likely slowing because landlords are seeing demand start to ease as renters get pinched by inflation,” says Fairweather. “With the cost of gas, food and other products soaring, renters have less money to spend on housing.”
“This slowdown in rent increases is likely to continue, however rents are still climbing at unprecedented rates in strong job markets like New York and Seattle and in areas like San Antonio and Austin that soared in popularity during the pandemic,” adds Fairweather.
Among metropolitan areas that saw the biggest gains, the leader in asking rates is Cincinnati, which saw a 39 percent spike year-over-year. Seattle, Austin and Nashville also saw increases exceeding 30 percent.
City Club Apartments has broken ground on the redevelopment of Union Central Tower, a historic skyscraper in downtown Cincinnati, to make way for 281 luxury apartments. Cincinnati landlords are seeing the biggest gains in the nation as residential asking rates are up 39 percent in June year-over-year, according to Redfin.
The top 10 markets that saw the biggest jumps in June are:
1. Cincinnati (39 percent)
2. Seattle (33 percent)
3. Austin (32 percent)
4. Nashville (31 percent)
5. New York City (27 percent)
6. Nassau County, N.Y. (27 percent)
7. New Brunswick, N.J. (27 percent)
8. Newark, N.J. (27 percent)
9. Portland, Ore. (24 percent)
10. San Antonio (23 percent)
The South Florida markets of Miami, Fort Lauderdale and West Palm Beach fell out of the top 10 in June as rental increases in the Florida metro areas began to moderate, according to Redfin.
Just three of the 50 most populous metro areas saw rents fall in June from a year earlier. Rents declined 12 percent in Milwaukee, 7 percent in Minneapolis and less than 1 percent in Kansas City, Mo. The same three metro areas saw rents decline in April and May as well.
In terms of municipal approaches to boosting affordability for renters, Fairweather says cities should look to follow Minneapolis’ lead.
“Minneapolis eliminated single-family zoning in 2018 and last year got rid of a rule that required residential developers to include parking spaces,” says Fairweather. “Now builders can replace parking spots with more housing units, which increases supply and therefore releases some upward pressure on rents.”
— John Nelson