US apartment rents saw the fastest year-over-year increase in more than a year this June, driven by robust demand, as reported by Redfin. Monthly rents climbed by 0.7% on an annual basis to reach $1,654, the highest level since October 2022.
The strong demand for rental units stems largely from the affordability challenges prospective homebuyers face in the current market. However, a significant supply of multi-family buildings has tempered the rise in asking rents. These new apartments, many of which began development during the pandemic-driven migration boom, are now coming to completion but are filling up at the slowest rate since 2020. The apartment vacancy rate has increased to 7.8%, up from 7.4% at the beginning of 2023 and 7% at the start of 2022.
“Demand from young renters, many of whom are opting to continue renting rather than confront the increasingly unaffordable homebuying market, is bolstering rent prices nationwide,” stated Redfin. “However, price growth has been kept in check due to the influx of new apartments designed to meet this demand.”
Among the 33 metros analyzed by Redfin, Virginia Beach, Virginia, experienced the steepest rent increase in June, with rents rising by nearly 13%. Cincinnati and Washington, DC, followed closely with approximately 12% increases.
Florida deviated from the trend, with rents declining in its four most populous metros last month. Jacksonville’s median asking rent dropped by more than 12% year-over-year in June, marking the metro’s largest recorded decrease since 2019. Rents in Tampa, Orlando, and Miami fell by single digits.
“With an abundance of supply on the market, renters may find themselves able to negotiate concessions such as free parking or discounted rent,” explained Redfin Senior Economist Sheharyar Bokhari. “However, renters in Florida should be cautious, as landlords are dealing with rising home insurance costs and may ultimately transfer these costs to tenants through higher rents.”
