Residential Real Estate News
U.S. Residential Asking Rents End 2024 at Lowest Levels in 3 Years
Austin Leads Rent Declines, Falling 23 Percent From Its Peak
According to Redfin, the median U.S. asking rent fell 0.3% year-over-year in December 2024, reaching $1,594--the lowest figure since March 2022. This represents a 0.1% decline from the previous month and a 6.2% drop from the record high of $1,700 in August 2022.
The median asking rent per square foot also decreased, falling 1.9% year-over-year in December to $1.78, with a slight 0.1% month-over-month dip.
The decline in asking rents can be attributed to an influx of new apartments, which has led to rising vacancies. Apartment completions surged 58.1% year-over-year in the third quarter of 2024--the highest level since 1974. Consequently, the vacancy rate for buildings with five or more units rose to 8%, the highest since early 2021.
"We're starting 2025 in a renter's market, with many renters paying less than they did a year ago, particularly in the Sun Belt," said Redfin Senior Economist Sheharyar Bokhari. "However, while asking rents fell in 2024, they may not decline much further this year as apartment construction begins to slow."
Declines Seen Across All Apartment Types, with Larger Units Experiencing the Sharpest Drops
December marked the sixth consecutive month of falling asking rents across all apartment sizes.
- The median rent for 0-1 bedroom apartments fell 1% year-over-year to $1,449.
- For 2-bedroom apartments, it declined 0.6% to $1,665.
- For 3+ bedroom apartments, it dropped 2.5% to $1,950.
Austin Leads Rent Declines, Falling 23% Below Its Peak
Austin, TX, experienced the sharpest rent drop among 44 major U.S. metropolitan areas analyzed by Redfin. Median asking rents in Austin fell 16.3% year-over-year in December, landing at $1,393--22.6% below the city's August 2023 peak.
Florida metros followed closely, with Tampa (-10.4%) and Jacksonville (-6.7%) seeing significant declines. Other notable decreases occurred in Nashville (-6.3%) and New York (-4.6%).
The Sun Belt region has been leading rent declines due to its robust housing construction and a correction in areas where rents had surged to unsustainable levels during the pandemic.
Rents Increase in Select Cities, Led by Providence and Virginia Beach
While rents fell in many areas, some cities saw notable increases. Providence, RI, recorded the largest year-over-year gain, with rents up 12.6%. Other cities with significant rent increases included Virginia Beach, VA (10.9%), Louisville, KY (10%), Baltimore, MD (10%), and Buffalo, NY (9.4%).
