Apartment List National Rent Report

Overview

Welcome to the March 2023 Apartment List National Rent Report. Our national rent index increased by 0.3 percent over the course of February, marking a return to positive rent growth after five straight month-over-month declines. This month’s increase is of a similar magnitude to the typical February price change that we saw in pre-pandemic years. After a few months of record-setting price declines, it appears that rental demand is rebounding in line with the usual seasonal trend.

Year-over-year rent growth is continuing to decelerate, and now stands at 3.0 percent, its lowest level since April 2021. Year-over-year growth is now pacing just slightly ahead of the average rate from 2018 to 2019 (2.8 percent), and is likely to decline further in the months ahead.

Even as rent growth has turned positive again, we continue to see easing on the supply side of the market. Our vacancy index now stands at 6.4 percent, its highest reading in two years. With a record number of multi-family apartment units currently under construction, we expect that supply constraints will continue to soften. 2023 could be the first time since the early stages of the pandemic that we see property owners competing for renters, rather than the other way around.

Rents increased in February in 62 of the nation’s 100 largest cities. Among large metro areas, Boston experienced the nation’s fastest rent growth this month with an increase of 1.5 percent. The Boston metro now also ranks among the top 10 for fastest year-over-year rent growth, even as it continues to be among the nation’s most sluggish rental markets when measured over the course of the pandemic as a whole. Over the past six months, no large metro area in the country has experienced positive rent growth.

Rents nationally increase by 0.3% month-over-month; prices up 3% year-over-year

The national median rent increased by a record-setting 17.6 percent over the course of 2021. This rapid growth in rent prices has been a key contributor to overall inflation, which remains top-of-mind for policymakers and everyday Americans alike. While our index has shown that rent growth has been consistently cooling since early last year, the housing component of the official inflation estimates produced by the Bureau of Labor Statistics (the Consumer Price Index, or CPI) continues to rise.¹ This is because movements in market rents lead movements in average rents paid, meaning that our index can signal what is likely ahead for the housing component of CPI.

We estimate that the national median rent increased by 0.3 percent month-over-month in February. This marks a notable return to positive rent growth following a five-month period of prices falling. The timing of this turn is consistent with the usual seasonal trend in the rental market. It’s typical to see prices dip and fall and early winter as moving activity slows, but things normally begin to pick back up around this time of year, and rent growth then tends to accelerate until the early summer peak.

But even as rent growth has tracked that typical seasonal pattern, the winter dip this year went well beyond what we normally see. The 3.4 percent decline in rents from last August through January was the sharpest dip in the national median rent over any five-month period in the history of our estimates (starting in 2017). This month, however, the extent to which prices ticked up was right in line with the average February increase of pre-pandemic years.

This month’s data suggests that we’re beginning to see a mild rebound in rental demand, following a particularly slow off-season to close out 2022. That said, the surging rent growth that we saw in 2021 and the first half of last year should still be solidly behind us. Even if demand continues to strengthen, a robust supply of new inventory hitting the market this year should keep prices in check. It looks like 2023 is shaping to be a year of modest positive rent growth.

Year-over-year rent growth is continuing to decelerate and now stands at 3 percent. This month marks the lowest year-over-year growth rate that we’ve seen since April 2021 and represents a return to a level of rent growth that was the norm in the years leading up to the pandemic. From 2018 to 2019, year-over-year rent growth averaged 2.8 percent, just slightly lower than the current level. And it’s likely that the year-over-year growth rate will continue to fall in the coming months, as we expect rent growth through the first half of this year to be slower than it was last year.

Vacancy index hits highest level in two years

As we’ve explored in detail, much of the 2021 rent boom was attributable to a tight market in which more households were competing for fewer vacant units. Our vacancy index spiked above 7 percent in the early months of the pandemic in 2020, as many Americans consolidated households and moved in with family amid the uncertainty and economic disruption of the pandemic’s onset. After that, however, rapid household formation drove a sharp tightening of the vacancy rate, which eventually fell to a low of 4.1 percent in fall 2021.

But after bottoming out at 4.1 percent in October 2021, our national vacancy index has been gradually easing for over a year, with the rate of easing picking up steam over the past six months. It took ten months for the vacancy index to increase from 4.1 percent to 5.1 percent, but just six months for it to jump from 5.1 percent to 6.4 percent, where it sits today. This month’s reading is the highest since February 2021, and is just barely below the 6.6 percent average rate from 2018 to 2019.

Looking ahead to the remainder of 2023, it’s possible that the vacancy rate could even surpass that pre-pandemic threshold. New apartment construction has picked up steam again after facing pandemic-related delays in recent years. In fact, there are currently more multifamily units under construction than at any point since 1970. As this new inventory hits the market over the course of the year, we could begin to see property owners competing for renters to fill their units, a marked change from the prevailing conditions of the past two years, in which renters have been competing for a limited supply of available inventory.

Vacancy trends are highly localized, and they have been a key indicator of rapidly evolving conditions in local markets across the U.S. throughout the pandemic. To explore the topic in greater detail, monthly vacancy data are now available for download for hundreds of cities, metros, and states, and can be easily linked to our existing rent estimates using Federal Information Processing System (FIPS) codes.

Rents rise month-over-month in 62 of 100 largest cities

The chart below visualizes monthly rent changes in each of the nation’s 100 largest cities from January 2019 to present. The color in each cell represents the extent to which prices went up (red) or down (blue) in a given city in a given month. In 2020, we can see that rents fell sharply in many of the nation’s largest and most expensive cities, while smaller and more affordable ones picked up steam, leading to some convergence in prices. Meanwhile, the dark red band in 2021 the rent heatwave which peaked in July and August 2021 when all 100 cities in this chart saw prices go up. The rightmost columns show the recent cooldown and how it has now begun to moderate.

Rents increased this month in 62 of the nation’s 100 largest cities, while an additional 5 cities saw prices remain flat. The largest city-level increase this month was in Oxnard, CA, where rents spiked sharply by 3.5 percent from January to February. Boston ranked second with a month-over-month increase of 2.9 percent. The price increases in Boston extended beyond the city-proper; the Boston metro as a whole had the fastest month-over-month increase among all metro areas with a population over one million, and the Boston metro now ranks among the top 10 for fastest year-over-year rent growth as well. For a more detailed exploration of the insights to be gleaned from this visualization, see our interactive writeup here.

Midwestern markets have seen the fastest rent growth over the past year

Major markets throughout the Sun Belt have experienced truly disruptive levels of rent growth since the start of the pandemic, but over the past year, the fastest growth has actually been occurring in the Midwest. The following table shows the ten metropolitan areas that have experienced the fastest rent growth over the past six months, over the past year, and since the pandemic started in March 2020:

Oklahoma City has seen the nation’s fastest metro-level rent growth over the past 12 months, with prices there up by 6.8 percent year-over-year, followed by Hartford, CT with an increase of 6.7 percent. Beyond that, the top ten includes six Midwestern metros – Indianapolis, Chicago, Columbus, Cincinnati, Kansas City, and Milwaukee. With many previously affordable Sun Belt markets having seen rents spike by 30 percent or more over the past two and a half years, markets in the Midwest may now represent some of the last bastions of affordability, and could therefore be drawing new attention. As noted above, Boston also cracks the top ten for year-over-year growth, the only pricey coastal market to make the list.

Of course, given the recent rental market cooldown, even the metros currently topping this list are experiencing relatively modest growth compared to what we were seeing in 2021 and the first half of last year. Last June, for example, all but one of the 52 metros with a population over one million logged year-over-year growth rates greater than Oklahoma City's current 6.8 percent rate which is now the nation’s fastest. And over the past six months, not a single large metro has seen prices increase.

The Bay Area rental market continues to sputter

The San Francisco metro experienced the nation’s sharpest rent decline in the first year of the pandemic, and has been the slowest market to recover in the time since then. In recent months, that sluggishness has continued with a seasonal slowdown. Metro-wide, Bay Area rents are down by 5.1 percent over the past six months, representing a much sharper cooldown than the national average.

The neighboring San Jose metro has experienced an even sharper decline of 6 percent over the past six months, which has brought that metro’s median rent back just below its March 2020 level. San Francisco and San Jose are the only two large metros where the median rent is currently cheaper than it was at the pandemic’s onset. And at the city-level, some markets in the San Francisco Bay Area are recovering even more slowly, particularly in the more densely populated core cities. In Oakland, rents are still down 14.3 percent compared to March 2020 – the biggest discount among the 100 largest cities – while in San Francisco proper, rents are still down 13.2 percent. Looking ahead, recent softness in the tech industry is likely to prevent a strong rebound in Bay Area rents in the near-term.

After San Francisco and San Jose the right-most column of the table is largely populated by other pricey coastal metros, including Seattle; Washington, D.C.; Boston; and New York. Even as many of these markets have rebounded over the past year and a half, they have still had among the most modest rent growth over the course of the pandemic as a whole. That said, just five metros have experienced rent growth of less than 10 percent since March 2020.

Notably, the table above also shows how some of the markets that had been booming fastest in the recent past have now quickly cooled off. For example, over the past year, prices are slightly down in Las Vegas (-3 percent) and Phoenix (-3 percent), despite the fact that both metros still rank among the top ten for fastest pandemic-era rent growth. Riverside, Jacksonville, and Tampa similarly rank in the top 10 for both fastest growth since March 2020 and slowest growth over the past year.

Conclusion

February’s 0.3 percent increase has brought an end to a five-month stretch of record-setting rent declines. That said, year-over-year growth fell again to 3 percent, and will likely decelerate further in the months ahead. And even if demand continues to rebound, a strong construction pipeline should temper rent growth for the remainder of the year. Prices may not fall further, but they are also unlikely to increase significantly.

For complete data, explore the interactive map below or head over to our rental data page, where you can download the most recent estimates for your city, as well as historic data going back to 2017. And as always, feel free to contact us with any questions!

A Note on Our Rent Estimate Methodology

Apartment List has long been committed to making our rent estimates as accurate and transparent as possible. With this in mind, we recently introduced a new methodology that rethinks our approach while building upon the robust foundation that was already in place. The most significant change in our new methodology is that we are now aiming to identify transacted rent prices, as opposed to the listed rent prices on which our old methodology was based. This controls for price fluctuations that arise over the course of a vacancy. Using these transacted prices, we calculate rent growth rates based on a same-unit approach that controls for compositional changes in the rental stock. As before, we continue to combat luxury bias in our rent data by using fully-representative median rent statistics from the Census Bureau’s American Community Survey.

A full report on our new methodology is available here. And if you have any questions or custom data requests, you can reach us at research@apartmentlist.com.

For more context on local data, check out our market-specific rent reports for the following cities:

• Atlanta, GA
• Austin, TX
• Baltimore, MD
• Boston, MA
• Boulder, CO
• Charlotte, NC
• Chicago, IL
• Cleveland, OH
• Colorado Springs, CO
• Dallas, TX
• Denver, CO
• Detroit, MI
• Fort Collins, CO
• Fort Lauderdale, FL
• Houston, TX
• Indianapolis, IN
• Jacksonville, FL
• Los Angeles, CA
• Miami, FL
• Minneapolis, MN
• New Orleans, LA
• New York, NY
• Orlando, FL
• Phoenix, AZ
• Raleigh, NC
• San Antonio, TX
• San Diego, CA
• San Francisco, CA
• San Jose, CA
• Seattle, WA
• Tallahassee, FL
• Tampa, FL
• Tucson, AZ
• Washington, DC

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About Apartment List Rent Reports:

Apartment List’s Rent Reports cover rental pricing data in major cities, their suburbs, and their neighborhoods. We provide valuable leading indicators of rental price trends, highlight data on top cities, and identify the key facts renters should know. As always, our goal is to provide price transparency to America’s 105 million renters to help them make the best possible decisions in choosing a place to call home. Apartment List publishes Rent Reports during the first calendar week of each month.