SANTA CLARA, Calif.–After consistently rising, the average rent on a one-bedroom apartment actually decreased during August, according to several surveys.
Apartment-listing website Rent.com showed a 2.8% decrease in rent for one-bedroom apartments during the month, while Realtor.com also reported a slight monthly decline in rent during August.
But the trend will not likely bring much relief to most renters.
“Last month’s rent declines are modest compared with the 23% overall increase in rent since August 2020, according to Realtor.com, and there is no guarantee that rents won’t move up again,” Orphe Divounguy, an economist at Zillow Group, told the Wall Street Journal. “As more households feel priced out of the sales market because of rising mortgage rates and near-record sales prices, overall demand for rentals is unlikely to fall drastically.”
Other Views
But many economists told the Journal rental market is likely to see more declines in the coming months, as prices typically dip during the fall and winter.
“Other analysts said they expect rents to decline on a monthly basis or remain flat through at least the end of this year,” the Journal reported. “That would stand in contrast to the same period in 2021, when rents continued to climb.”
Now, rent is moderating for a combination of factors, analysts said, including an increase in new apartment construction along with weakening consumer sentiment that might be discouraging people from signing more expensive apartment leases, the Journal said.
Relief ‘A Ways Off’
“Any substantial relief for cost-burdened renters is still a ways off, however. Most apartment tenants have signed one- or two-year leases at a fixed monthly price,” the report added. “The lag between today’s market rental prices and what most tenants actually pay is also part of why housing costs, as tracked in the Bureau of Labor Statistics’ consumer-price index, are still shown to be rising.”
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