The Northeast and Midwest were the biggest gainers, with asking rents rising roughly 5% from a year earlier. Rents in the West and South were roughly flat.
(NASDAQ: RDFN) —The median U.S. asking rent rose 2.2% year over year to $1,981 in February, the largest gain since January 2023, and increased 0.9% from a month earlier. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.
Asking rents hit a low point last February, which is one reason for the sizable year-over-year increase this February. Mortgage rates were also likely at play.
“Mortgage rates ticked back up in February—a disappointing development for prospective homebuyers, who just a few months ago got a glimmer of hope as rates finally started to fall,” said Redfin Chief Economist Daryl Fairweather. “With rates still elevated, many are opting to continue renting, which is buoying rental demand, and as a result, rent prices.”
It’s worth noting that the Federal Reserve is expected to lower interest rates before the end of the year, which could turn more renters into buyers and cause asking rents to dip again.
While rents jumped in February, they’re relatively stable compared to the past two years, when the pandemic sent the rental market on a rollercoaster ride. For the majority of 2022, growth in asking rents slowed rapidly following a surge during the pandemic, and in 2023, asking rents actually declined on a year-over-year basis.
The median asking rent in February was $73 below (-3.5%) the record high set in August 2022 (rents often peak in the summer and trough in the winter), 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.
The Northeast and Midwest Lead the Nation in Rent Increases
The median asking rent in the Northeast jumped 5.2% year over year to $2,481 in February—the largest gain in nine months. Rents in the Midwest saw a similar increase, rising 4.9% to $1,441—the biggest increase in five months. Meanwhile, asking rents in the South and West were essentially flat, rising 0.3% to $1,635 and falling 0.1% to $2,349, respectively.
The Northeast and West have been nearly tied for the most expensive rental region for much of recent history, but switched spots over the last year; the West was the priciest region for much of the pandemic homebuying frenzy, but the Northeast reclaimed the top spot in November 2022 and has held it ever since.
Rents are likely holding up best in the Northeast and Midwest because those regions haven’t been building as much as the South and West, meaning landlords aren’t under as much pressure to fill vacancies.
To view the full report, including charts and methodology, please visit:
https://www.redfin.com/news/redfin-rental-report-february-2024
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, title insurance, and renovations services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can have our renovations crew fix it up to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.6 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 4,000 people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240311887739/en/
Contacts
Redfin Journalist Services:
Kenneth Applewhaite, 206-414-8880
press@redfin.com
