US Median Rent Drops to $1,967 in 2023 - Biggest Decline in Over 3 Years
In 2023, US median rent prices fell by 2.1%, reaching $1,967, driven by a 7% increase in apartment supply and landlords offering more incentives to tenants. Despite this decline, rents remain 22% higher than pre-pandemic levels.
Despite a downward trend, rental prices in the US remain significantly elevated compared to pre-pandemic figures.
Highlights
- The median asking rent across the US dropped to $1,967 in November 2023, marking a 2.1% decrease from last year, yet still 22% above levels before the pandemic, according to a Redfin report.
- Apartment construction surged by 7% year-over-year in Q3 2023, prompting landlords to offer incentives such as free rent months or reduced parking fees to attract tenants.
- Rental vacancy rates climbed to 6.6%, the highest since early 2021, reflecting increased housing availability.
With mortgage rates hitting decades-high levels and homeownership becoming less affordable, renters are finally experiencing some relief. The rise in apartment supply has contributed to the largest annual rent decline since early 2020.
Redfin's chief economist, Daryl Fairweather, notes, “Renters are now benefiting from better deals as landlords provide concessions and rents begin meaningful declines. The expanded housing supply gives renters more choices.”
Rents Are Declining but Still Elevated
Though rents have decreased, they remain substantially above pre-pandemic benchmarks. November 2023 rent is only 4.2% below the record high of August 2022 ($2,054) but remains 22% higher than November 2019.
Economic uncertainty and affordability challenges have lowered rental demand, encouraging landlords to reduce asking prices. Consequently, rental vacancies have increased, reaching 6.6% in Q3 2023.
Mortgage rates peaked near 8% in October 2023—the highest in over 20 years—dramatically increasing monthly payments compared to the sub-3% rates of 2021. Rates have recently eased slightly to just above 7%, their lowest since July.
Despite higher mortgage rates, home prices have not declined; in October 2023, the median sale price rose by 3.4% year-over-year to $391,800.
These trends have made homeownership less attainable. The National Association of Realtors now estimates an annual household income of $107,000 is necessary to afford a typical home, up from $88,000 a year prior.
Fairweather adds, “As buying homes grows more expensive, renting is losing its stigma. However, if home prices and mortgage rates decrease in 2024, we may see more renters transitioning to homeownership.”
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