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Rental Market Trends in the USA

Open source - RentGroup Inc.

Q2/2023 Rent Price Trends Across the United States.

National rents remained stable in April with the median rent rising just under a third of one percent year over year. The 0.29 percent increase is the smallest yearly change in 37 months. Yearly rent growth has been decelerating for eight months now, registering single digit growth in each survey period since September 2022 after nearly a year of double digit increases from October 2021 through August 2022.

On a monthly basis, rents dropped nearly a quarter of one percent from March to April. The decline marks a rebound from the 1.77 percent increase from February to March, but is still below mean declines measured since prices began moderating late last summer. Monthly changes from September 2022 through March 2023 averaged 0.53 percent.

The national median rent is now $1,967. That's less than March's price of $1,971, but a full $30 higher than the most recent low in February of $1,937. Rents peaked in August of 2022 at $2,053. April's price represents a 4.19 percent decrease from that high point, a difference of $86. Over a two year period, rents remain elevated. Rents have risen 16.33 percent since April 2021, an annual rate of 8.17 percent that equates to more than $276.

Broad trends across the rental industry, including increased vacancy rates, new inventory, a cooling housing market and demand below seasonal norms have driven price slowdowns in recent months. However, the slowing of monthly declines may indicate an end to declines in the near term as the rental market enters the high season for demand through the spring and summer.

Let's look at where rent prices stand today.

National Rent Price Trends

April rent prices increased 0.29 percent over March. This was the smallest yearly change since March 2020 when rent dipped by a single percentage point. Yearly changes have come in below five percent in each of the last five months, and below 10 percent every month since September 2022. Year-over-year rents increased by double digit numbers from October 2021 through August 2022, averaging 14.65 percent over that time and peaking at 17.54 percent in March 2022.

April's 0.23 percent decline from March brought the median monthly rent to $1.967. Still, rents remain elevated from the most recent low in February by 1.55 percent. Rent's began moderating in September 2022. Over that time, month-over-month rents have declined by 0.53 percent on average.

Prices have now fallen on a monthly basis in six of the last eight months. Outside of increases of less than two percent in March 2023 and November 2022, April's decline is the smallest monthly change during that period.

State Rent Price Trends

At the state level, 78.57 percent of markets saw positive yearly rent growth. Increases were greatest in the South and Midwest. Of the ten biggest gainers, nine were from those regions with New Hampshire the only remaining state.

Just over a a fifth of markets were down year over year, lead by decreases in the Mountain West where rents increased sharply early in the pandemic. Neighboring Washington state also contributed to monthly declines. Together, three states from the Mountain West and Washington saw yearly declines above four percent.

Monthly changes were split more evenly with nearly 60 percent of states increasing in price and just over 40 percent registering declines. Georgia, Louisiana, Missouri, and New Jersey led monthly increases with gains above three percent. Alabama and New Hampshire each had monthly declines above two percent, while Oregon and Arizona registered -1.99 and -1.95 percent declines respectively.

South Dakota led yearly increases in April with 28.59 percent growth. Five other Midwestern states including, Iowa, North Dakota, Nebraska, Michigan and Indiana also saw yearly increases among the largest gainers. Mississippi registered the second largest yearly increase at 24.69 percent. It was joined among the largest yearly gainers by regional neighbors Arkansas and North Carolina. The only remaining state among the 10 largest gainers was New Hampshire which saw a 14.28 percent increase year over year.

Among the 10 states with the highest year-over-year rent growth, all demonstrated increases above 9 percent:

Year-Over-Year State Decreases

Yearly declines in April were led by Mountain West states that saw an early influx of pandemic related migration. Along with Washington, Idaho, Nevada and Arizona all saw yearly declines greater than four percent. Rents in Idaho have now declined for the seven straight months.

Of the nine states that saw yearly decreases, five were in the West, two were in the Midwest, and two were in the South.

Metro Areas Rent Price Trends

Among the 50 most populous metropolitan areas, the South and Midwest again dominated the list of largest gainers. Eight of the ten largest gainers were from these two regions.

The Providence, RI metro area saw the largest yearly increase at nearly 16 percent, outpacing Raleigh-Cary, NC which had seen the largest increases of any metro for several months in a row. Two other metros, Indianapolis, IN and Charlotte, NC, each saw yearly increases above 10 percent. Another eight metros saw rents increase by between five and 10 percent, while 17 additional metros saw positive yearly growth less than five percent.

Twenty-one metros observed price declines, led by New Orleans, LA and Austin, TX, each with yearly decreases in excess of 14 percent. Mountain West locations including Phoenix, AZ and Las Vegas, NV also registered steep yearly declines along with Southern metros like Oklahoma City, OK, Birmingham, AL, and Memphis, TN. In the West, Sacramento, CA and Seattle, WA also saw price drops from a year ago.

The following metro areas have experienced the greatest increase in rent prices year over year.

The following metro areas have experienced the greatest decreases in rent prices year over year.

Rental Industry Trends
Certain California cities extend pandemic-era eviction policies into summer

The Wall Street Journal reports that San Francisco extended its local eviction ban for unpaid rent until summer and will deploy $24 million in rental assistance — enough to help at least 3,000 households avoid eviction. Oakland and Berkeley have also extended their eviction bans.

Los Angeles did not extend the ban after it expired on March 31, and landlords can now evict tenants with 30 days' notice. From 2021 to 2022, evictions more than doubled from 12,646 to 34,398 in Los Angeles. According to the research group National Equity Atlas, unpaid back rent across the greater Los Angeles area could exceed $1 billion based on past census data.

New study finds that rent control may affect affordability

While rent control bills in Nevada, New Jersey, Massachusetts and beyond are being debated to limit rent increase frequency and amounts, what does rent control look like once established?

Stanford Graduate School of Business Economics professor Rebecca Diamond attempted to answer this question in a new study in San Francisco. Research showed that if landlords are limited in how much and how often they can increase the rent, it may negatively affect rental inventory as they move on to more profitable businesses.

The study found that rent control increased the probability a renter stayed at their address by close to 20 percent. At the same time, they found that landlords with rent control properties would take them off the market by converting them to condos, selling, or redeveloping the building. It showed a reduction of 15 percent in rental inventory.

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