One-third of property managers are offering concessions as rental market cools
Rhea-AI Summary
Zillow's latest data reveals a cooling rental market, with 33.2% of rental listings offering concessions in July 2024, up from 25.4% a year earlier. This trend is driven by an apartment construction boom, with June seeing the highest number of completed multifamily units in 50 years. Rent growth has slowed to 5.1% year-over-year, a significant decrease from the 22.3% increase in the previous two years.
Six major metro areas, including Raleigh, Charlotte, and Atlanta, have over 50% of rentals offering concessions. The rental vacancy rate remains at 6.6%, the highest since winter 2021. While the supply boom continues, the number of units under construction has decreased for eight consecutive months, suggesting a potential peak in the market.
Positive
- 33.2% of rental listings are offering concessions, up from 25.4% a year ago
- Multifamily rent growth slowed to 5.1% year-over-year, down from 22.3% in the previous two years
- Record-breaking 60,000 multifamily units completed in June, highest in 50 years
- Rental vacancy rate steady at 6.6%, indicating more options for renters
Negative
- Multifamily rents still rising, albeit at a slower pace
- Number of multifamily units under construction has decreased for eight consecutive months
- Some metro areas (San Jose, Baltimore, Milwaukee, Pittsburgh) show a decrease in concessions compared to last year
News Market Reaction 1 Alert
On the day this news was published, ZG declined 1.76%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
An apartment construction boom is giving renters more options and better deals
- More new multifamily units were completed in June than in any month in the past 50 years.
- More than half of rentals are offering a concession in
Raleigh ,Charlotte ,Atlanta ,Salt Lake City ,Nashville andAustin . - The rental vacancy rate held steady at
6.6% . The last time a higher share of rentals sat empty was winter 2021.
The share of rental listings on Zillow offering a concession — a sweetener such as free weeks of rent or free parking offered as an incentive to rent — climbed to
"Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits," said Zillow Chief Economist Skylar Olsen. "Now is a great time for renters to find a deal, with more new apartments hitting the market than at any time in the past several decades. Rents are still growing, but it's a far cry from the steep rent hikes of two or three years ago, and renters will find sweeteners being offered by more than half of rentals in some places. A slowing job market and lower mortgage rates could mean falling rents if the current trends hold."
The past two years have been fairly friendly for apartment renters. While multifamily rents are still rising, up
Renters have enjoyed concessions more often during the past two years, as well. The share of rental listings on Zillow offering at least one concession was at a 29-month low in July 2022 at
More than half of rental listings on Zillow are offering a concession in six major metro areas:
One reason for the rental market cooldown is a multifamily construction frenzy that is opening up new options for renters and rebalancing the supply and demand seesaw. Almost 60,000 multifamily units were completed nationwide in June — the latest data available — which is more than in any month in half a century.
The supply boom still has legs, but it may have hit its peak. While there are still a huge number of multifamily units under construction — before this recent boom, 1973 was the last time this many units were being built —that number has fallen in each of the past eight months.
The rental vacancy rate, another measure of market tightness, held steady at
Zillow provides a user-friendly platform for housing providers to share concessions information with prospective renters. Property managers can easily list concessions for their properties, and renters can find all available offers under the "Special Offers" tab on participating buildings' detail pages, enabling them to make well-informed housing decisions.
Metropolitan | Typical Rent, | Multifamily | Multifamily | Listings With a | Concessions | Concessions |
0.4 % | 2.6 % | 33.2 % | 0.2 ppts | 7.8 ppts | ||
0.6 % | 3.4 % | 15.9 % | 0.4 ppts | 3.9 ppts | ||
0.5 % | 2.0 % | 30.2 % | 1.7 ppts | 2.8 ppts | ||
0.4 % | 4.4 % | 24.9 % | 2.5 ppts | 8.1 ppts | ||
0.2 % | -1.4 % | 47.6 % | -1.1 ppts | 10.3 ppts | ||
0.1 % | 0.8 % | 35.4 % | -0.6 ppts | 5.7 ppts | ||
0.7 % | 4.4 % | 47.4 % | 0.6 ppts | 2.5 ppts | ||
0.4 % | 3.2 % | 30.2 % | 1.7 ppts | 8.3 ppts | ||
0.1 % | 2.6 % | 17.4 % | -0.1 ppts | 4.3 ppts | ||
0.0 % | -1.4 % | 52.2 % | -0.2 ppts | 14.5 ppts | ||
0.2 % | 4.2 % | 21.7 % | 2 ppts | 7.1 ppts | ||
-0.2 % | -0.3 % | 50.1 % | 0.3 ppts | 9.6 ppts | ||
0.2 % | 0.5 % | 38.6 % | -0.4 ppts | 0.7 ppts | ||
0.2 % | 2.2 % | 19.1 % | -2.3 ppts | 1.7 ppts | ||
0.6 % | 4.8 % | 23.3 % | 2.5 ppts | 1.5 ppts | ||
0.5 % | 3.1 % | 44.2 % | 1 ppts | 12.1 ppts | ||
0.1 % | 2.3 % | 49.8 % | -0.2 ppts | 10.9 ppts | ||
0.4 % | 0.1 % | 34.3 % | 1.4 ppts | 12.4 ppts | ||
0.3 % | 0.3 % | 42.0 % | 1 ppts | 13.9 ppts | ||
0.3 % | 1.3 % | 48.9 % | 0.8 ppts | 14.1 ppts | ||
0.5 % | 2.7 % | 32.7 % | -2.2 ppts | -5.6 ppts | ||
0.9 % | 3.9 % | 21.6 % | -3.1 ppts | 3.8 ppts | ||
0.2 % | -0.3 % | 38.7 % | 0.1 ppts | 8.6 ppts | ||
0.5 % | -0.8 % | 53.1 % | -2 ppts | 15.7 ppts | ||
-0.1 % | -1.1 % | 46.4 % | -2.4 ppts | 12.3 ppts | ||
0.6 % | 2.9 % | 43.5 % | 3.1 ppts | 6.3 ppts | ||
0.0 % | 2.5 % | 29.3 % | 1.8 ppts | 5.6 ppts | ||
0.6 % | 3.8 % | 21.8 % | -0.5 ppts | -0.2 ppts | ||
0.3 % | 4.0 % | 20.0 % | 1.6 ppts | 5.7 ppts | ||
-0.3 % | -4.5 % | 50.5 % | 0.9 ppts | 14.1 ppts | ||
-0.02 % | 2.2 % | 39.4 % | -0.1 ppts | 2.5 ppts | ||
0.4 % | 4.9 % | 26.7 % | -2.6 ppts | 7.9 ppts | ||
0.6 % | 3.3 % | 34.4 % | -1.3 ppts | 10.5 ppts | ||
1.0 % | 2.4 % | 33.2 % | 0.6 ppts | 8.8 ppts | ||
0.4 % | 6.5 % | 23.1 % | -0.3 ppts | 4.6 ppts | ||
0.9 % | 2.7 % | 33.6 % | 3.1 ppts | -9.7 ppts | ||
0.2 % | 0.2 % | 50.8 % | 0.5 ppts | 11.1 ppts | ||
0.9 % | 5.0 % | 28.6 % | -1 ppts | 10.7 ppts | ||
0.9 % | 7.0 % | 13.6 % | -1.4 ppts | 6 ppts | ||
-0.1 % | -1.4 % | 45.6 % | -0.2 ppts | 17.8 ppts | ||
0.5 % | 4.8 % | 17.1 % | -1.5 ppts | -1.8 ppts | ||
1.2 % | 3.1 % | 23.8 % | 3.3 ppts | 11.1 ppts | ||
0.3 % | -2.4 % | 53.3 % | 1.8 ppts | 14.7 ppts | ||
0.1 % | 2.8 % | 25.8 % | -0.2 ppts | 9.8 ppts | ||
0.9 % | 5.1 % | 38.5 % | 1.5 ppts | 4.9 ppts | ||
0.2 % | 6.2 % | 30.4 % | 5.3 ppts | 11 ppts | ||
0.2 % | 3.5 % | 10.1 % | -0.7 ppts | 2 ppts | ||
0.3 % | 1.7 % | 50.9 % | -1.7 ppts | 6.7 ppts | ||
0.6 % | 8.3 % | 23.3 % | -0.7 ppts | 9.5 ppts | ||
0.9 % | 5.0 % | N/A | N/A | N/A | ||
0.4 % | -0.7 % | 36.3 % | 7.2 ppts | 12.8 ppts |
*Table ordered by market size |
About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in
Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce® and Follow Up Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2024 MFTB Holdco, Inc., a Zillow affiliate.
View original content to download multimedia:https://www.prnewswire.com/news-releases/one-third-of-property-managers-are-offering-concessions-as-rental-market-cools-302219238.html
SOURCE Zillow
FAQ
What percentage of rental listings on Zillow (ZG) are offering concessions in July 2024?
How much have multifamily rents increased since July 2022 according to Zillow (ZG)?
Which metro areas have the highest percentage of rental listings offering concessions on Zillow (ZG)?
How many multifamily units were completed in June 2024 according to Zillow's (ZG) report?
