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United States asking rents ticked up for the second straight month in May, hitting their highest recorded level since 2022, according to Redfin.
The median United States asking rent rose 0.8 percent year over year in May to $1,653, the highest level since October 2022 and just $47 below the record high, according to a report released Tuesday.
May’s increase came after a 0.9 percent annual increase in April, which was preceded by 11 straight months of decreases. While prices are starting to increase again, they are being restrained by the large amount of new apartment inventory still hitting the market following the post-pandemic building boom, the report noted. May’s 0.8 percent increase was stable compared to the 17..5 percent increase recorded during the pandemic and the 4.1 percent decrease recorded this past summer.
“Demand from young renters remains high, as many of them are opting to stay put rather than contend with an increasingly unaffordable homebuying market,” said Redfin Senior Economist Sheharyar Bokhari. “But so far, rent price growth has been limited because there are enough new apartments to meet demand, even in the busiest time of year for the rental market.”
The past three quarters have seen rental vacancy hover around 6.6 percent, the highest level since 2021, though the rate is no longer growing as it was during the pandemic, the report notes.
The biggest annual increase was recorded in Washington, D.C., where rent prices rose 11.1 percent from a year earlier. D.C. was followed by Cincinnati with a 10.9 percent increase, Chicago with a 10.8 percent increase and Virginia Beach, Virginia, with 10.3 percent.
Rents are increasing starkly in the Midwest because the region has not built enough new housing to keep up with demand, the report posits.
Rents continued to decrease in the Sun Belt cities that saw huge increases during the pandemic and that built more new housing than other cities, with Jacksonville, Florida, recording a 10.1 percent decrease, San Diego seeing an 8.7 percent annual decrease, and Austin a 7.2 percent decrease.
