National rents grew at a double-digit annual pace (+15.5%) for the 10th straight month in May, but the amount was smaller—which could signal relief later this year, according to a new Realtor.com report.
The U.S. median rental price hit its latest new high of $1,849 per month in May, a 26.6% increase since 2019 before the pandemic began, according to the new Realtor.com Monthly Rental Report. The increase was the smallest since September 2021.
“Our May data suggests that the rent surge is beginning to lose some steam, in part because incomes can’t keep up, even in the strong job market,” said Danielle Hale, chief economist at Realtor.com. “Although rent growth remains historically high, the rate has been gradually cooling since January, pulling back from 2021’s feverish pace. In a bit of good news for renters, the deceleration picked up in May which means if these trends continue, last month’s prediction of rents surpassing $2,000 sometime this summer is going to take longer to materialize.”
All unit sizes posted double-digit rental price gains year-over-year: studios, up 16.9% to $1,530; one-bedrooms, up 15.2% to $1,708; and two-bedrooms, up 14.8% to $2,076, according to the report. Rents grew on a year-over-year basis in all 50 of the largest U.S. metros and at a faster pace than the national rate in nearly half (21) of these markets, the data showed. The biggest annual rental price gains were in Miami (+45.8%), Orlando, Fla. (+28.4%), Providence, R.I. (+23.8%), San Diego (+22.7%) and Tampa, Fla. (+22.4%).
The report also showed that a key driver in the ongoing rent surge is a lack of supply as rental vacancy rates dropped sharply during the pandemic. These trends are magnified in the biggest cities that tend to attract younger residents, the data showed.