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The latest report from real estate company Redfin shows that rent rose 2.4% year over year to $1,942 in the U.S., the smallest increase since May 2021 and the lowest level in nearly a year.
According to the report, rent growth is slowing around the nation because of slowing demand and growing supply. Demand has slowed due to high costs, inflation, widespread economic uncertainty, and slowing of what the website calls household formation, but the report shows rents remain 22.5% higher than they were in January 2020.
In Tampa Bay, prices were up 3.5%, and rent is over $2,000, ranking the metro in the middle of the pack in terms of growth.
Rental supply has grown due to an influx of construction in recent years, as well as a recent increase in the number of people choosing to rent out their homes instead of sell, the report states.
“We’re watching closely to see whether rents start falling year over year. That would be a welcome relief for renters because it hasn’t happened since the onset of the pandemic,” Redfin Chief Economist Daryl Fairweather stated in the report. “If rents start falling on a year-over-year basis, it will mean that renters have more room to negotiate. It may also prompt more landlords to sell their properties because they’re no longer getting a good return on their investment.”
Another report from Bloomberg reveals that around the country, rents rose 15% on average between May 2021 and May 2022 alone, and the cost to rent a home or apartment in the U.S. has risen a 350% since the 1980s.
According to Bloomberg, Miami saw the most significant jump, with rents increasing by 45% between May 2021 and May 2022.
Orlando, Tampa Bay, Austin, Texas, Nashville, Tennessee and Las Vegas are among the top 10, alongside coastal cities like Boston and San Diego, making the Sun Belt the costliest in rent growth over the last couple of years.
Florida Atlantic University studied which major markets in the Sunshine State are experiencing premiums of a minimum of 7% above their expected costs.
Here’s how it breaks down: