Rents have fallen by the largest amount in the last 7 years

According to the latest Zillow data, rents have fallen by the largest amount in the last 7 years (when they began collecting data). Rents dropped 0.4% month over month in November, in addition to a 0.1% month over month decline in October. National asking rents now sit at $2,008, still 8.4% more than this time last year. The Zillow data shows that rents are falling fastest in Raleigh, NC (-1.3%), Austin, TX (-1.2%), Seattle (-1.1%), San Jose, CA (-1.1%), and New York (-1.0%). And, rents are rising in Louisville, KY (0.7%), Memphis, TN (0.6%), Buffalo, NY (0.5%), Birmingham, AL (0.4%), and Miami (0.4%). Redfin also released data showing median rents increased 7.4% year over year to $2,007 in November. This was the smallest increase in 15 months and the sixth consecutive month in which rent growth slowed.

Source: Redfin (December 2022) Commenting on the data, Redfin Economics Research Lead Chen Zhao notes: “Rent growth is likely to continue cooling…Asking rents are already down annually in 14 of the metros Redfin tracks, and we expect declines to become more common in the new year. That should ultimately help slow inflation further. Slow inflation will lead to lower mortgage rates, which should also bring more homebuyers back to the market.” Realtor.com also released its November Rental Report, showing a similar trend, with November being the tenth straight month of slowing rent growth. Median asking rents declined to $1,712, down by $22 month over month and $69 from the peak in July. Faster rent growth was seen in Midwest markets like Indianapolis (9.6%) and Kansas City, MO (8.7%).