Rent prices in the U.S. have decreased for the 19th month in a row, currently averaging $1,691. Despite this decline, rental prices remain higher than pre-pandemic levels by over 14%. The drop in rents has discouraged multifamily housing construction, leading to a significant decline in permits issued, which could reduce inventory and cause future rent hikes. Projections indicate that without new units entering the market, rent growth may resume as early as 2024, thereby impacting affordability for many Americans, especially in high-demand areas like New York City.
This represents a major retreat in multifamily construction permitting, no doubt due to the fact that rents were falling year over year throughout 2024.
We expect rents to start to grow again in the coming years as the pace of new units hitting the market slows.
Even though the rents have been gradually decreasing over the past year and a half, Americans are still paying much more for housing than they did before the COVID-19 pandemic.
The median asking rent price across the 50 largest metros slid to $1,691 in February, shedding $15 compared with the same time a year ago.
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