Rental market returning to pre-pandemic trends, but prices remain … – NBC 15 WPMI

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Rent prices have started to slow as the year comes to a close after a boom in construction projects helped bring more options to the market, a welcome sight for people whose wallets have been beaten down by inflation since the economy reemerged from a pandemic slump.

October was the second consecutive month of declines in the national median rent price, dipping to $1,978, according to data from Rent. Last month’s rent level was the first time the median price was below $2,000 in five months and the lowest price since April of this year.


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The rate at which asking rents have increased has slowed this year as a record level of multifamily construction, which includes projects like condos and apartment buildings, helped increase supply on the market. The surge in construction came amid the spike in rent prices, which has slowed down as rent growth has started to slow and return to pre-pandemic norms.

Asking rents have dropped in three of the last six months, including two of the last three. The slowdown follows an 11-month run from October 2021 to August of 2022 that brought a double-digit annual increase in rents.

The declines indicate the market may be getting back to seasonal trends that were seen before the pandemic where prices go up in the summer and decline in the fall and winter months.

While prices have started to decline some, renters are unlikely to see prices that are lower than they were prior to the post-pandemic surge.

“We’ve hit a new floor for which prices can grow rather than a ceiling from which prices will fall,” said Jon Leckie, a researcher at Rent.

In addition to modest declines in asking prices, landlords are also offering more concessions to potential renters to secure someone to sign a lease. Concessions include things like free months of rent, free or reduced parking costs or other perks that don’t drop the asking price but offer enough incentive for a renter to sign onto a lease.

A report from Zillow found 30% of listings are offering at least one concession, a perk for renters that is happening across the country as 43 of the 50 largest markets in the U.S. have more concessions than last year. They are most commonly found in markets that had the largest booms in multifamily construction, which creates more competition among landlords for renters.

The breathing room for renters comes as the housing market has slumped after taking off in the two years after the pandemic-induced recession brought interest rates to near-zero, helping push mortgage rates to record lows and extending purchasing power for buyers, creating intense competition for a limited supply of homes that sent prices skyrocketing.

A hot housing market also helped boost rent costs as buyers quickly sold their homes and then waited to find a new place to live. That trend has not reversed as the market cooled.

“(A slowed housing market) sparks some demand for rent,” Leckie said. “But I think it’s also a double effect where it is sparking a little bit of demand but it’s also keeping people from moving. You’re sort of borrowing from Peter to pay Paul in that situation.”

High mortgage rates and listing prices have drastically slowed the real estate market this year, but that hasn’t been followed with increased demand for rental units, evidenced by a vacancy rate of 6.6%. Higher vacancy rates mean there are more options for people in the market for a new place to live.

“Landlords are really going to have to compete for tenants in a way that they didn’t have to before and the way that they do that typically is by slashing prices a little,” Leckie said.

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