US Rental Prices Experience Slight Decrease in March
Austin, Texas, experienced the most significant decrease, with rent prices plummeting by over 10 percent, followed closely by San Diego and Portland, Oregon.
Across the United States, rental prices saw a slight dip last month on an annual basis, with anticipated spikes in the future due to restricted construction, as reported by real estate brokerage Redfin.
“Current asking rents have leveled off below the record high of $1,705 reached in 2022.
“March marked the 13th consecutive month of minimal fluctuations in asking rents, showing a year-over-year change of less than 1 percent during this period.”
Among the 44 major metropolitan areas surveyed by the brokerage, Austin, Texas, recorded the largest year-over-year percentage drop in rent at 10.7 percent. This was trailed by San Diego, Portland, Minneapolis, and Raleigh, North Carolina.
Redfin noted that the notable rent drop in Austin is a result of the city being a leading homebuilder during the COVID-19 pandemic boom. With the recent fall in rental prices, Austin has relinquished its title as Texas’s most expensive large city for renters.
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“During the frantic relocation period of the pandemic, rental prices soared due to a lack of available apartments to satisfy the growing demand. Subsequently, builders accelerated construction, leading to a decline in rents throughout 2023 and early 2024 as landlords vied for tenants,” stated Redfin.
“There remains a significant number of newly constructed apartments entering the market, which is keeping rent increases at bay. However, demand from renters remains robust due to high costs associated with home buying, which limits further declines in rent—at least for the time being.”
Economists at Redfin have indicated that rental prices may rise again due to the slowdown in new apartment construction, reducing supply and encouraging landlords to increase rental rates.
Chen Zhao, the head of economic research at the firm, noted that tariffs in the U.S. might increase the cost of apartment construction since a substantial portion of building materials are sourced from abroad.
“NAHB is pleased that President Trump acknowledged the significance of essential construction materials for housing and opted to maintain existing exemptions for Canadian and Mexican products, including a specific exemption for lumber from any new tariffs at this time,” Hughes commented.
Renters Under Pressure
Rental prices have surged over the past four years, placing financial strain on renters.
It is estimated that 10.9 million low-income renter households in the U.S. encounter a deficit of 7.1 million affordable and available rental units, resulting in a mere 35 such homes for every 100 households in this category.
“Eighty-seven percent of extremely low-income renters are considered cost-burdened, while 75 percent are severely cost-burdened. This demographic represents about one-quarter of all renters, 43 percent of all cost-burdened renters, and 68 percent of severely cost-burdened renters,” the report indicated.
“Over 90 percent of extremely low-income renters are either employed, elderly, disabled, enrolled in educational institutions, or act as single adult caregivers.”
The task force’s goal is to leverage underutilized federal lands to enhance the housing supply. In a March 17 post on the social media platform X, Turner emphasized the need for 7 million affordable homes and pointed out that the Interior Department manages one-fifth of the land in the U.S.
“With a slowdown in apartment construction and an increase in single-family home development, the disparity between single-family and multifamily rents is expected to lessen,” the analysis concluded.
