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U.S. News

American cities are seeing rental rates falling fast

By CM Chaney · October 29, 2023

In brief…

  • US rental prices fell slightly in October after red-hot growth
  • Some cities see over 15% monthly rent drops as pandemic trends reverse
  • Uncertainty and new supply spurring competition that lowers costs
  • Biggest declines in pandemic boomtowns like Austin and Phoenix
  • Trend challenges pandemic real estate buyers as low-rate sellers rent instead of sell
America's rental market is showing initial signs of cooling with slight nationwide price dips in October and some cities seeing over 15% (Augusta, Georgia - above) monthly rent drops, signaling challenges for pandemic real estate buyers.  Sir Mildred Pierce / Wikimedia

America’s red-hot rental market is showing initial signs of cooling as the average monthly cost for apartments fell slightly in October, according to rental platform Zumper.

The median monthly rent for a one-bedroom apartment dipped 0.4% to $1,505, while two-bedrooms decreased 0.2% to $1,862. Though still above 2022 levels, experts predict outright rent declines this winter.

Some cities already see dramatic drops, like Augusta, Georgia’s 15.2% plunge to $840 monthly. Lincoln, Nebraska followed with a 14.4% decrease to $770.

St.Louis, MO, Fresno, CA and Greensboro, NC, rounded out the top five places where costs had fallen steepest since 2022.

Experts cite pandemic migration patterns reversing as economic uncertainty deters moves.

Zumper CEO Anthemos Georgiades said uncertainty leads renters to postpone moves until confident in the economy, while new supply increases competition and lowers prices.

Declines were fastest in “pandemic boomtowns” like Miami, Phoenix and Austin, per the report. Five of the seven Texas cities included in the study had monthly rent decreases.

Falling rents challenge pandemic-era real estate buyers facing reluctant sellers clinging to low mortgage rates, spurring accidental landlord trends.

But homeowners locking in 2-3% rates amid soaring 8% current rates are renting homes instead of selling, realtor Adie Kriegstein noted.