Redfin Report

The Sun Belt Is Seeing Some of the Biggest Rent Declines in America

(NASDAQ: RDFN) —The median asking rent in Seattle fell 7.3% year over year in April, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s the biggest drop among the U.S. metros Redfin analyzed.

Next came nine Sun Belt metros: Austin, TX (-6.6%), Nashville, TN (-5.9%), Jacksonville, FL (-5.6%), Miami (-5%), San Diego (-4.7%), Phoenix (-4.6%), Charlotte, NC (-4.5%), Tampa, FL (-4.3%) and Orlando, FL (-3.2%).

Metro-level data in Redfin’s report covers apartment asking rents in 33 major U.S. metropolitan areas. National data represents the entire U.S. Please note that this report marks the debut of Redfin’s new rental market data methodology, which is why some figures may not match up with figures in past rental reports. A detailed methodology is available in the report.

“The Sun Belt has built a ton of new apartments in recent years, partly to meet the surge in demand brought on by the flood of people who moved in during the pandemic housing boom. But the boom is over, and now property owners are struggling to fill vacancies, which is causing rents to fall,” said Redfin Senior Economist Sheharyar Bokhari. “The good news is that the uptick in housing supply in the Sun Belt has improved affordability for renters, which can be a lesson for other American cities grappling with housing affordability challenges.”

Rents in some Sun Belt markets are also just coming back down to earth after skyrocketing to unsustainable levels during the pandemic, Bokhari added.

Seattle is not in the Sun Belt, but like the Sun Belt, it has seen a surge in apartment construction in recent years.

Apartment construction across the U.S. has been slowing lately, but there’s still a pipeline of recently built units coming online, which is one reason the rental vacancy rate has risen.

It’s worth noting that four of the 10 metros with the steepest April rent declines are in Florida. A separate Redfin report covering the homebuying market found that on the west coast of Florida—which is facing a housing insurance crisis due to intensifying natural disasters—home prices are stagnating as housing supply surges.

Nationwide, Asking Rents Rose for First Time in a Year—Driven By Increases in the Midwest and Northeast

The median U.S. asking rent rose 1.1% year over year to $1,648 in April—the first gain in a year. Asking rents climbed 1.7% from a month earlier.

While rents ticked up in April, they’re stable relative to the rollercoaster ride of the past few years; U.S. asking rents rose as much as 17.6% year over year during the pandemic, and then fell as much as 4.1% this past summer.