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U.S. Apartment Rent Growth Flattens Out
For the first time in decades, U.S. apartment rents are rapidly flattening and may soon turn negative while demand remains healthy and the economy continues to produce jobs, writes RealPage chief economist Jay Parsons. The reason: “the huge volume of new supply hitting the market is giving renters a lot more options – leading to more turnover among deal-shopping renters.”
Year-over-year, same-store effective asking rents for new leases inched up by 0.28% in August and remained on track to potentially turn negative by September, Parsons writes. That contrasts with a year ago, when annual rent growth measured 11%.
“Supply volumes will remain elevated through 2024, which means significant headwinds on rents until 2025,” according to Parsons. “New construction starts have materially dropped off in 2023 due to financing issues and other challenges, pointing to significantly lesser supply by the second half of 2025 and into 2026.”
- ◦Lease
