Have Rent Prices Reached Their Tipping Point?

National rent prices simultaneously hit a new record high AND displayed some early signs of cooling in June.

Key Takeaways from Zumper’s Latest National Rent Report

Zumper, an online rental marketplace, just released its latest national rent report for June 2022.  Here are some key takeaways from this report:

• Median rent for a one-bedroom rental unit increased +0.5% m/m to reach yet another all-time high.
• Simultaneously, median rent for a two-bedroom rental unit plunged an eye-popping -2.9% m/m.
• Miami’s red-hot rental market is beginning to cool and is no longer the nation’s third-most expensive market.
• San Jose stepped into Miami’s shoes to become the country’s third-most expensive rental market.
• New York City’s median one-bedroom rent of $3,600 is a breathtaking increase of +40% y/y.

Ten Most Expensive Median Rents for One-Bedroom Units in June 2022

Reminder from Zumper – The signal rent prices may have reached their tipping point is that in June, rent price growth increased +0.5% m/m rather than the rent price growth rate of +1% to +2%  we’ve been seeing in recent months. 

         Metro                    Price          M/M%                Y/Y%

1. New York City NY          $3,600       30%                 40.10%
2. San Francisco CA          $3,000       40%                 7.50%
3. San Jose CA                 $2,570       60%                 19.00%
4. Boston MA                   $2,500       -0.40%              13.60%
5. Miami FL                      $2,400       -5.90%              25.00%
6. Los Angeles CA             $2,360       0.0%                 18.00%
7. San Diego CA               $2,320       -6.10%               20.80%
8. Washington DC             $2,290       0.0%                  5.50%
9. Santa Ana CA               $2,110        3.40%               24.10%
10. Oakland CA                  $2,100        2.40%                5.00%

Top Five Metros Where Rents Rose Most in June 2022

1. Norfolk VA                   $1,170         6.40%                 20.60%
2. Fresno CA                    $1,520         6.30%                 25.60%
3. Chicago IL                    $1,870        6.30%                 32.60%
4. El Paso TX                    $860            6.20%                 21.10%
5. Henderson NV              $1,560          6.10%                 20.90%

Top Five Metros Where Rents Fell Most in June 2020

1. Tallahassee FL                 $860          -6.50%                 7.50%
2. Anchorage AK                $1,060         -6.20%                 8.20%
3. Urban Honolulu HI          $1,530       -6.10%                   3.40%
4. San Diego CA                 $2,320       -6.10%                  20.80%
5. Syracuse NY                   $930          -6.10%                  8.10%

Decline of -2.9% in Median Two-Bedroom Rent “Significant”

“A -2.9% decline in median two-bedroom rent is the most significant drop we’ve seen since pre-pandemic times,” said Anthemos Georgiades, CEO of Zumper.“But as the housing market begins to cool, don’t expect a rental market crash. We’re still facing a housing shortage and the labor market remains robust, so we anticipate a leveling off of rent prices, but not a freefall.”

Thanks to Zumper and Inman.