Apartment Rents Bounced Back in February

Real Estate

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National apartment rents rebounded slightly in February following consecutive monthly declines that were spurred by a flood of new units that are hitting the market. 

Renters that signed new apartment leases at the start of 2023 are paying approximately 3.4% less than they would have nearly half a year prior. This marks the sharpest drop in national rent over any five-month period since estimates began in 2017, according to a recent national rent report from the listing website Apartment List.

February’s figures suggest “that we’re beginning to see a mild rebound in rental demand, following a particularly slow off-season to close out 2022,” Apartment List’s research team said in its rental report.

“That said, the surging rent growth that we saw in 2021 and the first half of last year should still be solidly behind us. Even if demand continues to strengthen, a robust supply of new inventory hitting the market this year should keep prices in check,” the research team said, adding that “2023 is shaping up to be a year of modest rent growth.”

From January to February, rental prices increased in 62 of the nation’s 100 largest cities. Only in five cities did rental prices remain flat.

The largest city-level increase from January to February took place in Oxnard, California (+3.5%), and Boston, Massachusetts (+2.9%), which had the “fastest month-over-month increase among all metro areas with a population over one million” and now ranks among the top 10 for “fastest year-over-year rent growth,” per the national report.

In terms of the price increase in Dallas’ rental market, the overall median rent fell by 0.3% in February and stood at an overall median price of $1,331, roughly the same as in January, according to Apartment List’s Dallas Rent Report.

The median rent in Dallas for a 1-bedroom apartment was $1,194 in February and $1,427 for a 2-bedroom, price data showed.

Interestingly, the median rent price in suburbs outside the metroplex was $1,454, roughly 8.5% more than the $1,331 inside Dallas proper, according to Apartment List. This is likely down to the drive to flee the city’s ongoing issues with crime and vagrancy.

Overall, Dallas is the 60th most expensive large city in the U.S., showing a comparable overall median rent with Fresno, California ($1,336), and Boise, Idaho ($1,328).

Demand for rentals has remained fairly consistent in light of some renters being priced out of buying homes due to rising mortgage rates and prices. Despite some slight decline in rental prices, they remain 20% or 30% higher than they were pre-pandemic in many cities, according to The Wall Street Journal.

“Renters are still having a tougher time than they were even a year-and-a-half ago,” Chris Salviati, an economist at Apartment List, said, per reporting by The Wall Street Journal.

Over a 12-month period, the median rent in Dallas rose by 4%, which was slightly higher than the state and national 3% and 3.5% averages, according to Apartment List.

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