Surging rents that have dominated some of the costliest U.S. housing markets, such as San Francisco, New York and Washington, DC, are finally showing signs of cooling, while rents in many other major markets continue to rise, according to a new report from online apartment finder Zumper.
Nationwide, prices for one-bedroom rental properties climbed 0.3% in December, despite rents falling in some of the costliest markets, while prices are up 1.8% from a year ago. Two-bedroom unit prices dipped 0.24% for the month but are up an average of 2.25% year over year.
In San Francisco, the priciest market on Zumper's list, rents fell 1.5% in the past month to $3,330 for a one-bedroom unit, while New York prices held steady at $3,000 and rents in Boston dipped 0.4% to $2,240.
One reason for the price softening, Zumper said, is due to concessions being offered by developers to fill apartment projects planned and built during the post-recession multifamily boom.
However, with rent increases still largely disproportionate to income growth, rising home prices and tight inventory conditions, many would-be buyers, particularly young first-timers, are staying on the sidelines renting or living with family.
Real estate website Zillow reported in August that nearly 14% of renters with good credit who can afford to buy a home in the country’s largest housing markets are forgoing homeownership — for now. Their reasons include marrying and having children later in life than previous generations, as well as moving to active job markets where they tend to wait to buy a home.
Areas of the country like Houston, TX, are experiencing a resurgence in demand for housing as population levels grow and the region’s economy comes out of an oil slump. This is also driving demand for rental properties, with the Zumper survey noting that rents for one-bedroom units in the city were up 4.8% over the past month to $1,090.
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