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Rents Drop Nationwide for Third Straight Month and Expected to ‘Continue to Dip Further in Coming Months’

By Prashant Gopal

Apartment rents across the US dropped in November by the most in at least five years, a sign that a key cost tracked by the Federal Reserve could be easing up.

A national index of rents fell by 1%, the third straight month-over-month decline and the steepest drop in data going back to 2017, Apartment List said in a blog post.

Prospective renters wait outside to enter an apartment unit during an open house in the Williamsburg neighborhood in the Brooklyn borough of New York, U.S., on Friday, Feb. 11, 2022. Long lines in the cold, fierce competition and bidding wars. This has become the reality for New Yorkers who are flooding the rental market in search of apartments, an increasingly scarce commodity less than two years after a pandemic-related exodus had some predicting the demise of the city.

The apartment market is cooling, in part because builders are adding supply and people are choosing to stay with family or roommates as they cope with higher costs for everything from utilities to groceries. As a result, landlords are easing up, especially in areas where rents rose the most during the pandemic boom. 

“The timing of the recent cooldown in the rental market is consistent with the typical seasonal trend, but its magnitude has been notably sharper than what we’ve seen in the past,” Apartment List said in the blog post. “It is likely that rents will continue to dip further in the coming months.”

Read more about the rental market slowdown.

The Federal Reserve has been closely watching economic data as it seeks to combat some of the highest inflation in decades. Apartment List said its data can be a leading indicator for rents as measured by the consumer price index, which is monitored by policymakers.

While the slowdown is widespread, Seattle posted the sharpest monthly drop among the 50 largest US metros, with rents falling 2.6% from October. 

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