Key Takeaways:
– Rental market prices dropped 2% in September compared to August, the largest monthly decrease since last year.
– The national median rent price is $2,011, the cheapest price since April.
– Prices were slightly higher than a year ago, rising 0.4% due to increased inventory and lower demand.
– 62.7% of markets registered a yearly price increase in September, while 37.2% saw a price decline.
– Rent prices in the Midwest grew by 5% compared to last year, while prices in the West declined by 1.61%.
– Montana had the largest decline in rent prices with a yearly drop of 15.5%.
– Pennsylvania had a large decline in the Northeast, slumping 4.5% year over year.
– Florida had the highest monthly decline in the South, with over 3%.
– Yearly price increases were driven by the Midwest, with Iowa leading with a 12% increase.
– Mississippi had the highest yearly rise, skyrocketing almost 16%.
– New York saw a yearly rise in prices of 11.28%.
– September’s decrease in rent prices may reflect a seasonal change, with prices falling in the fall and winter before rising again in the spring and summer.
– Despite the monthly price declines, the yearly rise in prices shows that the rental market is still strong.
BiggerPockets:
The rental market boom is showing a seasonal dip. Rent levels dropped in September for the first time in six months, according to the latest market report from Rent.com.
Overall rent levels dipped 2% compared to August, the largest monthly decrease since last year. The national median rent price is $2,011, the cheapest price since April, the research firm found.
Still, prices were slightly higher than a year ago, rising 0.4% due to increased inventory and lower-than-usual demand, as prices had steadily risen since bottoming out in February.
Overall, state rents remain up over the year, maintaining the 2023 trend of a 60/40 split of markets that are up versus down. In September, 62.7% of markets registered a yearly price increase, compared to 37.2% that saw a price decline in the same period.
However, price growth nationally is being held down by below-normal demand and increased inventory, the report noted.
States With the Lowest YoY Rent Growth
The change in rent prices was not the same across the country. The Midwest saw the largest price hike of 5% growth compared to last year, while rent prices in the West have been declining for several months, declining 1.61% compared to September 2022.
In the West, Montana led declines with a yearly drop of 15.5%. Washington and Oregon also saw the third and fourth-highest yearly decline. Elsewhere, Idaho, Nevada, and Utah declined in the 5% to 8% range.
In the Northeast, Pennsylvania was the only state to have a large decline, slumping 4.5% year over year. Meanwhile, in the South, Florida led with the highest monthly decline of more than 3%, while other traditionally expensive states, including California, New York, and Massachusetts, also saw monthly declines of over 2%.
| State | Year-over-Year Rent Growth | Month-over-Month Change in Rent | Median Rent |
| Montana | -15.49% | -0.22% | $1,715 |
| Oklahoma | -10.62% | -2.40% | $960 |
| Oregon | -10.09% | -0.73% | $1,702 |
| Washington | -7.96% | -0.97% | $2,312 |
| Idaho | -7.84% | -2.98% | $1,570 |
| Nevada | -5.72% | -0.68% | $1,566 |
| Utah | -5.71% | -1.38% | $1,602 |
| Florida | -5.49% | -3.35% | $2,114 |
| Pennsylvania | -4.50% | -0.95% | $1,651 |
| Virginia | -3.00% | -1.29% | $1,986 |
States With the Highest YoY Rent Growth
Yearly price increases were driven by the Midwest region, where seven of the largest gainers are located. Iowa had the largest yearly increase in the area, jumping 12%. Mississippi leads with the highest yearly rise, skyrocketing almost 16% from a year ago, and was also the only Southern state to make it to the top 10 gainers list. Still, its monthly gains were relatively flat.
Meanwhile, both Dakotas saw a yearly increase despite a 2% decline over the month for South Dakota, with Kansas, Wisconsin, and Illinois also having strong yearly growth. Illinois was the only state with a monthly rent increase above 1.5%.
New York also saw a yearly rise in prices of 11.28% despite a monthly decline, while New Hampshire was flat over the month but rose 7.38% compared to the same period a year ago.
| State | Year-over-Year Rent Growth | Month-over-Month Change in Rent | Median Rent |
| Mississippi | 15.86% | 0.06% | $1,175 |
| Iowa | 12.13% | -0.97% | $1,158 |
| South Dakota | 11.32% | -1.91% | $1,164 |
| New York | 11.28% | -2.18% | $2,762 |
| North Dakota | 9.58% | 0.04% | $1,067 |
| Minnesota | 9.41% | -0.21% | $1,599 |
| Kansas | 8.99% | 0.02% | $1,207 |
| Wisconsin | 8.95% | 0.27% | $1,534 |
| New Hampshire | 7.38% | 0.17% | $1,987 |
| Illinois | 6.85% | 1.81% | $2,019 |
The Bottom Line
September’s decrease might just reflect a seasonal change that landlords haven’t seen since the pandemic, the report found. In other words, the trend of prices falling in the fall and winter before rising again in the spring and summer could be back.
While the monthly price declines could be concerning for landlords, the yearly rise in prices shows that the rental market is still strong. And with the Fed not backing down from rising interest rates and housing prices continuing to skyrocket, it’s likely that the rental boom could be here to stay for just a little while longer.
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Property Chomp’s Take:
The rental market boom that has been experienced in recent years is showing signs of a seasonal dip. According to the latest market report from Rent.com, rent levels dropped in September for the first time in six months. Overall, rent levels decreased by 2% compared to August, marking the largest monthly decrease since last year. The national median rent price now stands at $2,011, the lowest it has been since April.
Despite the recent dip in rent prices, they are still slightly higher than they were a year ago, with a 0.4% increase. This can be attributed to increased inventory and lower-than-usual demand. Rent prices had been steadily rising since hitting a low point in February. However, the overall trend in state rents remains positive, with 62.7% of markets registering a yearly price increase in September.
The dip in rent prices nationally can be attributed to below-normal demand and increased inventory. The report suggests that the rental market is still strong, but the growth in prices is being held back by these factors.
The decrease in rent prices was not consistent across the country. The Midwest saw the largest price hike, with a 5% growth compared to last year. On the other hand, rent prices in the West have been declining for several months, with a 1.61% decrease compared to September 2022. Montana led the declines in the West, experiencing a yearly drop of 15.5%. Other states in the region, including Washington and Oregon, also saw significant declines.
In the Northeast, Pennsylvania was the only state to experience a large decline, with a 4.5% decrease year over year. In the South, Florida led with the highest monthly decline of over 3%. Expensive states like California, New York, and Massachusetts also saw monthly declines of over 2%.
On the other hand, the Midwest region saw the highest yearly rent growth, with seven states in the region experiencing increases. Iowa had the largest yearly increase at 12%, while Mississippi had the highest yearly rise overall, skyrocketing almost 16% from a year ago. New York also saw a yearly rise in prices of 11.28%.
The report suggests that September’s decrease in rent prices may just reflect a seasonal change that landlords haven’t seen since the pandemic. Historically, prices tend to fall in the fall and winter before rising again in the spring and summer. While the monthly price declines may be concerning for landlords, the yearly rise in prices indicates that the rental market is still strong.
With the Federal Reserve not backing down from rising interest rates and housing prices continuing to skyrocket, it is likely that the rental market boom could continue for a little while longer. However, it’s important to note that these are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
