Apartment Asking Rents Highest In More Than a Year
The upturn in February 2024 is even more welcome when compared to the preceding February when asking rents hit a low point
After months of bad news for landlords about the steady downward slide of asking rents, a small bounce in February this year offers some reason for optimism.
The median 2.2% increase in year-over-year asking rents was the highest since January 2023 and up 0.9% from January this year. The upturn in February 2024 is even more welcome when compared to the preceding February when asking rents hit a low point – which may explain the uptick, according to a Redfin analysis. The Northeast and Midwest benefited most.
High mortgage rates may be another factor accounting for higher asking rents. As mortgage rates rise, many prospective homebuyers are being forced to keep renting, boosting demand and asking rents, Redfin noted. That could reverse if the Fed lowers rates later this year.
“The median asking rent in February was $73 below (-3.5%) the record high set in August 2022, but was still $387 higher (+24.3%) than it was in February 2020—the month before the coronavirus was declared a pandemic and a moving frenzy started driving up rents. That means affordability remains strained for many U.S. renters,” Redfin stated.
The company defines median rent with reference to new leases, not the median of what all renters are paying.
The dearth of new multifamily construction in the Northeast and Midwest may have encouraged significant rent growth in both regions in February. In the Northeast, median asking rents spiked 5.2% to $2,481 – the biggest gain in nine months. Rents in the West rose 4.9% to $1,441 – the highest hike in five months. The Northeast is now considered the nation’s most expensive rental region, followed closely by the West.
In the South, however, median asking rents rose just 0.3% to $1,635, and in the West they slipped 0.1% to $2,349.
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