Asking Rents Hit Highest Level Since 2022

Key Takeaways:

• Median U.S. asking rent reached $1,653 in May, the highest since October 2022.
• Washington D.C. saw the largest annual increase in asking rents at 11.1%.
• High home prices are driving rental demand, but new apartment supply is helping to moderate rent growth.

The median U.S. asking rent surged to $1,653 in May, marking the highest level since October 2022, according to the latest data from Redfin, This 0.8% increase from the prior month represents the second consecutive month of rising rents following an 11-month period of declines. Despite the nearly year-long dip, rents remain substantially high, now just $47 below the record high.

Hot Market: Washington D.C. emerged as the hottest rental market in May, with the median asking rent soaring 11.1% year over year. Close behind were Cincinnati (10.9%), Chicago (10.8%), Virginia Beach, VA (10.3%), and Minneapolis (10.3%). These cities reflect a robust demand for rental properties despite the broader economic conditions.

• Conversely, several markets experienced significant declines in asking rents. Jacksonville, FL saw the most substantial drop at -10.1%, followed by San Diego (-8.7%), Austin, TX (-7.2%), Seattle (-5.9%), and Phoenix (-5.5%). These declines highlight the uneven nature of rent trends across different regions.

High & Low: San Jose, CA continues to hold the top spot for the highest overall rental prices, with median rents at $3,275—up 1.2% from last month and 0.9% from the previous year. On the opposite end of the spectrum, Atlanta, GA has the lowest median rent at $1,570.

What They’re Saying: Sheharyar Bokhari, Redfin Senior Economist, noted that elevated home prices are contributing to sustained demand in the rental market. “Demand from young renters remains high, as many of them are opting to stay put rather than contend with an increasingly unaffordable homebuying market. But so far, rent price growth has been limited because there are enough new apartments to meet demand, even in the busiest time of year for the rental market,” Bokhari explained.

As the rental market enters its peak season, these trends highlight the ongoing challenges and dynamics within the housing sector.