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Investing.com -- The median asking rent in the US saw a 1% year-on-year decline in May, settling at $1,633, according to a recent report from Redfin (NASDAQ:RDFN), the technology-based real estate brokerage. The figure is $72 lower than the record high set in August 2022. On a month-over-month basis, the median asking rent increased by 0.5% in May, which is typical for the period.
Out of the 44 major US core-based statistical areas (CBSAs) analyzed by Redfin, 28 reported a decrease in asking rents last month, marking the highest number since September 2023. Redfin’s Senior Economist Sheharyar Bokhari attributed this trend to the elevated apartment supply due to the near 50-year high in apartment construction in the US. He noted that despite strong demand from renters, it’s not keeping pace with the supply, leading to many units remaining vacant for months.
The report highlighted that the rental vacancy rate for buildings with five or more units was 8.2% in the first quarter, tying with the prior quarter for the highest level since early 2021. Less than half of newly constructed apartments are being rented out within three months, marking one of the lowest shares on record.
Asking rents in Austin, TX fell 8.8% year over year in May to $1,385, the lowest level since February 2021 and $414 below the August 2023 record high. This was the largest decline among the 44 major CBSAs analyzed by Redfin. Other cities with significant declines included Minneapolis (-6.3%), Columbus (WA:CLC), OH (-3.5%), Nashville (-3.4%), and Portland, OR (-3.4%).
In contrast, the median asking rent in Cincinnati rose 7.4% year over year to a record $1,460 in May, the largest increase among the 44 CBSAs analyzed. Other cities with record high rents in May included Chicago (up 1.9% Y/Y to $1,781), Memphis (1.9% to $1,274), and Washington, D.C. (2.4% to $2,104).
The report also indicated that the median asking rent for 0-1 bedroom apartments fell 0.7% year over year to $1,492. For 2 bedroom apartments, it decreased 1.8% to $1,704, marking the largest decline since February 2024. And for 3+ bedroom apartments, it fell 0.2% to $2,009, marking the smallest decline in about a year.
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