The median U.S. asking rent rose 1.1% year-over-year to $1,964 in January, according to new data from Redfin (NASDAQ:RDFN). This marked the largest annual increase since March 2023. On a month-over-month basis, the asking rent level remained unchanged.
However, Redfin also noted that year-over-year rent growth has ranged between -2.1% and +2.4% over the past year. In comparison, rent growth in 2022 was as low as 4.8% and as high as 17.7%.
On a regional measurement, Redfin determined the median asking rent in the Midwest increased 4.6% year-over-year to a record $1,437 in January. Rents were also up in the Northeast (2.3% to $2,427) and the West (0.6% to $2,358) while rents in the South were unchanged at $1,637.
At the same time, the 6% rental vacancy rate in the fourth quarter tied with the third quarter for the highest level since early 2021. Redfin attributed the vacancy rate to increased multifamily construction. Redfin Chief Economist Daryl Fairweather expected apartment completions to peak this year.
“There’s not a huge incentive for renters to buy right now,” said Fairweather. “Asking rents are stable, and while mortgage rates have dipped in recent months, they haven’t fallen enough to make the financial equation of homebuying feasible for many people. If you’re a renter who’s interested in buying but isn’t in a rush, there’s not much downside to waiting for mortgage rates to fall and your savings to grow.”
