U.S. Apartment Rents Drop Year-Over-Year For First Time Since Early 2021

Year-over-year apartment rent growth turned negative this month for the first time since early in the pandemic.

On a nationwide average, August apartment rents were 1.2% cheaper than they were in the same month last year, according to Apartment List’s September rent report released Wednesday.

Rent prices were also down month-to-month in August, .01% below July levels, Apartment List found. National rent growth has been cooling over the last 18 months after peaking at a 17.6% increase over the course of 2021. 

The report predicted that given sluggish demand and historic numbers of apartment buildings under construction, rent prices are likely to drop further through the rest of the year. 

Vacancy rates have been ticking up for the past 22 months, according to the report, which marked the rate this month at 6.4%, surpassing pre-pandemic levels and approaching a pandemic peak set in 2020.

Meanwhile, a record nearly 1 million apartments were under construction in the U.S. at the beginning of the year, adding to already-high supply levels.

Seventy-two of the 100 cities analyzed in the report saw prices decline year-over-year this month. Geographically, the data showed that rent declines were common in Sun Belt metros like Austin, Texas, Las Vegas and Phoenix. Prices in the region were down 5% in the last year as the markets continued to soften following a rapid rise during the first few years of the pandemic. 

Cities that have seen increases are concentrated in the Northeast and Midwest. Chicago, Kansas City and Hartford, Connecticut, all saw 3% year-over-year rent growth.