U.S. apartment rents spiked in September but rent growth this fall is slower than last year, according to the latest quarterly HotPads® Rent Report.
Hotpads, which compiles data from rental listings in 35 major metro areas, found the current median rent is $1,500 per month, a 2.5 percent bump from last year. However, this time last year, rents had risen by 3 percent.
In fact, rent growth is slower now than last year in 19 of the 35 largest metro areas. The most significant decreases were in Seattle, which saw a 3.4 percent drop from 7.7 percent last year to a modest 4.3 this year, and Portland, Oregon where growth slowed from 4.5 percent to 2.8. Still, median rent in Seattle climbed to $2,225 per month.
Rents in Sacramento are rising the fastest of the 35 largest metro areas tracked, but growth has slowed in Sacramento as well. The median rent there rose to $1,940 a month, up 6.5 percent from a year ago but below last year’s 7.7 percent rent growth.
According to the report, new supply of apartments is a major factor in the slowing and is expected to keep rent growth slow or stagnate in the following year. Other factors include high-income renters choosing to buy homes, and affordability.
“Rental affordability is still a top concern, but new construction is starting to alleviate supply constraints, taking pressure off the rental market,” says Joshua Clark, economist at HotPads. “Waves of new construction have transformed Seattle and Portland, the two metros with the biggest decrease in rent appreciation.”
One-bedroom properties have slowed the most. While rent for a one-bedroom stands at around $1,280, that represents a 2.2 percent increase, compared to 3 percent last year. The hardest hit markets for one-bedroom units are San Antonio, Washington, D.C., and Seattle.
Launched in 2005, HotPads is a Zillow® Group-owned apartment and home search platform for renters in urban areas across the United States. For more information on the U.S. rental market, visit HotPads.com.
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