So far in 2024, all apartment unit sizes are seeing their first annual decline in asking rent since 2020, with the national median at $1,647.

In a noteworthy shift for the multifamily housing market, asking rents have slipped across all unit sizes for the first time since 2020, according to a recent Redfin report. This trend reflects changing dynamics influenced by rising vacancy rates, regional variations, and broader economic factors. Let’s dive into the key takeaways and explore what this means for renters and investors.

Key Takeaways

Across the Board Decline

The national median asking rent now stands at $1,647, marking a $53 decrease from the record high in 2022. Here’s how the different unit sizes fared:

• Studios and 1-Bedroom Apartments: A modest 0.1% year-over-year decline brought the median rent to $1,498.
• 2-Bedroom Apartments: These saw a slight 0.3% slip, settling at an average asking rent of $1,730.
• 3-Bedroom Units and Larger: The most significant drop occurred here, with a 2.4% decrease, bringing the median rent down to $2,010.

Impact of Rising Vacancy Rates

Vacancy rates play a crucial role in rent fluctuations. The national vacancy rate has remained at 6.6% for the past four quarters, the highest level since 2021. Larger apartment buildings (those with 5+ units) face an even higher vacancy rate of 7.8%, indicating an oversupply relative to demand.

Regional Variations

Geographically, the decline in asking rents varies. Notably, Texas and Florida—both experiencing a multifamily construction boom—recorded the most significant declines. Here are some metros with notable rent decreases:

• Austin, TX: -16.9%
• Jacksonville, FL: -14.3%
• San Diego, CA: -12.7%
• San Francisco, CA: -7.6%
• Tampa, FL: -5.9%

Renter Outlook

While construction may slow down, prices are expected to rise again eventually. Redfin’s senior economist, Sheharyar Bokhari, advises renters to seize the opportunity now. Families seeking larger apartments (with at least 3 bedrooms) may find favorable deals.

A Note on Accuracy

Keep in mind that these findings are based on asking rents, which may not always align with actual rents paid by tenants. Landlords might offer concessions or discounts to fill vacancies, potentially resulting in even lower effective rents.

Additionally, consider consulting other rental reports, such as Apartment List’s comprehensive data from 100 metros and RealPage’s market forecasts, to gain a holistic view of rent growth trends.

Remember, the multifamily market remains dynamic, and staying informed is essential for renters, investors, and industry professionals alike.