Realtor.com® May Rental Report: Slower Decline in Rents Indicates Inflation May Persist
Rhea-AI Summary
The Realtor.com May Rental Report reveals a -0.7% decline in median asking rent to $1,732. This marks the tenth consecutive month of rental decreases, though the rate of decline has slowed, complicating the inflation outlook. The fall in rents spans all unit sizes, with studio rents at $1,449, one-bedrooms at $1,612, and two-bedrooms at $1,925. Regional differences are noted, with the South and West experiencing declines, while rents rose in the Midwest and Northeast, driven by labor market demands and supply constraints. The report suggests ongoing rent declines could continue to influence shelter inflation and the Consumer Price Index (CPI).
Positive
- Median asking rent fell -0.7% year-over-year to $1,732, indicating a cooling rental market.
- Rents declined across all unit sizes: studios (-1.9%), one-bedrooms (-1.1%), and two-bedrooms (-0.7%).
- The South saw significant rent decreases, with Austin (-9.3%), Nashville (-8.3%), and San Antonio (-8.2%) leading the way.
- Rents in the West also fell, with Phoenix (-4.5%), San Francisco (-4.3%), and Las Vegas (-4.1%) showing notable declines.
- Some markets in the Midwest and Northeast saw rent increases, suggesting strong local economies.
Negative
- The pace of rental declines has slowed, complicating the Federal Reserve's efforts to control inflation.
- The median asking rent is only $24 (-1.4%) below its August 2022 peak, indicating progress in reducing rent costs.
- The CPI shelter index remains 'stickier' with a 5.5% year-over-year increase, suggesting that overall inflation may persist.
- Rent increases in some Midwest and Northeast markets indicate supply constraints that could further drive up costs.
News Market Reaction – NWSA
In the trading session that priced this news, NWSA gained 0.51%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Median asking rent fell -
The median asking rent nationally for 0-2 bedroom units fell by -
"Slowing rent growth preceded slower shelter inflation, and falling market rents – as we've seen in the last 10 months of Realtor.com® data – have furthered that deceleration in shelter prices," said Danielle Hale, Chief Economist at Realtor.com®. "As a significant driver of overall inflation, shelter costs need to slow further and are expected to do so. However, waning market rent declines foreshadow smaller Consumer Price Index shelter declines ahead and put a question mark on whether we've seen enough to rein in overall inflation, complicating the Fed's policymaking."
CPI shelter index is "stickier"
Shelter costs have been a big driver of overall consumer cost increases. The Consumer Price Index for shelter, which includes rent of primary residence and the owners' equivalent rent of residences, was up
Rents drop in South and West, increase in Midwest and Northeast
The biggest year-over-year declines in median asking rent were seen in the South, led by
Rents decline across all size categories
Median rents for units of all sizes continued to fall in May. The median asking rent for studios nationwide fell by -
Unit Size | Median Rent | Rent YoY | Rent Change – 5 years |
Overall | -0.7 % | 21.5 % | |
Studio | -1.9 % | 17.3 % | |
1-bed | -1.1 % | 20.3 % | |
2-bed | -0.7 % | 23.3 % |
Rental Data – 50 Largest Metropolitan Areas – May 2024
Metro | Median Rent (0-2 Bedrooms) | YOY (0-2 Bedrooms) |
-5.8 % | ||
-9.3 % | ||
-5.5 % | ||
1.6 % | ||
-1.5 % | ||
NA | NA | |
-5.0 % | ||
0.7 % | ||
1.9 % | ||
2.7 % | ||
-2.3 % | ||
-3.7 % | ||
-0.7 % | ||
0.5 % | ||
NA | NA | |
-3.2 % | ||
4.4 % | ||
-4.1 % | ||
-2.5 % | ||
-4.1 % | ||
-2.5 % | ||
-2.5 % | ||
-3.8 % | ||
-4.4 % | ||
4.3 % | ||
2.9 % | ||
-8.3 % | ||
NA | NA | |
2.2 % | ||
0.0 % | ||
-6.4 % | ||
-0.4 % | ||
-4.5 % | ||
2.4 % | ||
2.7 % | ||
NA | NA | |
-3.4 % | ||
-3.3 % | ||
-1.7 % | ||
NA | NA | |
4.8 % | ||
-8.2 % | ||
-1.8 % | ||
-4.3 % | ||
3.7 % | ||
1.0 % | ||
-1.8 % | ||
-2.8 % | ||
3.2 % | ||
1.5 % |
Methodology
Rental data as of May 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
Media Contact: Sara Wiskerchen, press@realtor.com
View original content:https://www.prnewswire.com/news-releases/realtorcom-may-rental-report-slower-decline-in-rents-indicates-inflation-may-persist-302168752.html
SOURCE Realtor.com