In September 2022, the U.S. rental market experienced single-digit growth for the second month in a row. The median rent growth across the top 50 metros slowed to 7.8% year-over-year for 0-2 bedroom properties. It is the lowest growth rate in 16 months but is still more than two times faster than the growth rate seen just before the pandemic hit in March 2020. The median asking rent was $1,759, down by $12 from last month and $22 from the peak. The deceleration from recent highs is consistent with what we have seen in recent for-sale data, suggesting that more typical seasonal cooling is returning to the rental market. Despite these encouraging indicators for renters, real affordability continues to worsen. In addition, inflation continues to remain close to a forty-year high, outpacing annual wage growth, evaporating real gains employees might see from an otherwise strong labor market.
Returning to in-person work and diversified social lives has made big cities attractive again. With the resurgence in urban rents, Chicago, IL (23.9%), Boston, MA (19.9%), and New York, NY (18.2%) were the top three metros with the highest year-over-year growth for 0-2 bedroom properties in September.
While Sun Belt metros saw the most dramatic rent growth through the pandemic, several of them have started to show signs of cooldown. For example, Dallas, TX (8.8%), San Diego, CA (8.4%), and Orlando, FL (8.3%) experienced their first single-digit rent growth after at least 15 months of double-digit trends. Additionally, rents declined from one year ago in Riverside, CA (-1.0%), Tampa, FL (-0.3%), Las Vegas, NV(-0.2%), and Sacramento, CA (-0.1%) for the first time since the onset of the pandemic.
In September, two-bedroom units saw a single-digit growth rate for the second month in a row. The median rent continues to drop, down by $23 from last month and $43 from July’s peak. The median rent for two bedrooms was $1,941 nationally, $116 (6.4%) higher than the same time last year and up by $355 (22.4%) compared to two years ago.
Rent growth for one-bedroom units also kept cooling. The median rent for 1-bedroom units was $1,647, down by $6 compared to last month and $18 less from the peak. However, it is still up by $117 (7.7%) compared to the previous year and 23.0% ($308) higher since September 2020.
While studios continue to outpace 1-bedroom and 2-bedroom units, they mirrored the cooling trend seen in larger units. In September 2022, the median rent for studio units was $1,483, down by $6 compared to last month and $15 from the peak. Nevertheless, it was still up by $136 (10.1%) year-over-year and $275 (22.8%) higher than two years ago.
Figure 2: National Rent Trend by Unit Size
Rental data as of September for units advertised as for-rent on Realtor.com®. Rental units include apartment communities as well as private rentals (condos, townhomes, single-family homes). All units were studio, 1-bedroom, or 2-bedroom units. We use communities that reliably report data each month within the top 50 largest metropolitan areas. National rents were calculated by averaging the medians of the 50 largest metropolitan areas.Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
With the release of its August 2022 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since September 2022 will not be directly comparable with previous releases (files downloaded before September 2022) and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
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