US apartment rents rise at slowest annual pace since mid-2021

US apartment rents rose 4.7 per cent in December from a year earlier, the slowest pace since July 2021, according to data from real estate firm Rent.com released on Thursday (Jan 26).

Rental prices fell 1.4 per cent from the previous month, with the national median price for an apartment dropping to US$1,978. Rents may be declining on a year-over-year basis by late summer, said Jon Leckie, a researcher at Rent.com.

The end of the pandemic housing boom should help push US inflation lower this year, although the timing is unclear because there’s a lag before market conditions are reflected in the consumer price index.

“We see home price valuations for new and existing homes coming off, they’re slowing rapidly,” Dana Peterson, an economist at the Conference Board, told Bloomberg TV. “That’s going to show up in rents.”

As the property market cools, divergences between US regions are becoming more noticeable. Ten states saw rent prices fall from a year earlier in December, including a 5.4 per cent drop in Idaho and 2.7 per cent and 2.5 per cent declines in Nevada and Arizona respectively.

Several big cities are seeing sizable decreases too, including Los Angeles and Chicago, the second-and third-largest metropolitan areas in the country. BLOOMBERG