Apartment Rents Fell for Third Straight Month in November

Apartment rents fell for the third straight month, consistent with typical seasonal trends, according to a new report from Apartment List.

The firm’s national index fell by 1 percent over the course of November, the third straight month-over-month decline and the largest single month dip since 2017. Experts say the timing of the recent cooldown in the rental market is “consistent with the typical seasonal trend, but its magnitude has been notably sharper than what we’ve seen in the past, suggesting that the recent swing to falling rents is reflective of a broader shift in market conditions beyond seasonality alone.”

“Going forward it is likely that rents will continue to dip further in the coming months as we move through the winter slow season for the rental market,” Apartment List experts say. But rents appear to be normalizing to pre-pandemic levels: from January through November, rents are up by 4.7 percent, an amount “much closer to the growth rates we saw in 2018 and 2019 than it is to the astronomical 18 percent growth that we saw at this point last year,” according to Apartment List.

“The cooldown in rent growth is being mirrored by continued easing on the supply side of the market,” the report states. “Our vacancy index now stands at 5.7 percent, after more than a year of gradual increases from a low of 4.1 percent last fall. And in the past three months, this easing of the vacancy rate has picked up steam again, after plateauing a bit over the summer. Today’s vacancy rate still remains below the pre-pandemic norm, but could get back to that benchmark as early as next spring, if the current rate of easing continues.”

Seattle had the biggest decline in November, with prices down by 2.6 percent month-over-month, while from a longer-term perspective Sun Belt markets continued to slump, with Las Vegas, Phoenix, Jacksonville, and Riverside — which have all seen rent growth of 30 percent or more since March 2020 — have posted rent growth below 1 percent over the last year.

“rent prices have dipped nationally for three straight months, and November’s 1 percent decline represents a record in our data. Year-over-year rent growth now stands at 4.6 percent, and is quickly falling back to pre-pandemic levels,” Apartment List analysts note.  ”The recent cooldown seems to suggest a shift in market conditions that goes beyond seasonality alone, as demand cools and supply constraints continue to abate. In the winter months ahead, we expect rental activity will continue to slow and we are likely to see continued price decreases to close out the year. That said, the recent declines are still quite modest in comparison to the skyrocketing growth of last year, and the national median rent is still 23 percent higher than it was in January 2021″