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Is The Rent Market Really Decreasing or Increasing?

Is the trend in Rental Deal,s Increasing or Decreasing?
Is the trend in Rental Deals, Increasing or Decreasing? (Photo: DataDrivenInvestor)

According to a published report by Rent Group Inc., rents annually increased by 4.77%. Still, the median market rent declined to $1,978 in December, a 1.41% drop from November and the lowest median rent since April. However, tenants were still paying $329 a month compared to December 2020, and more markets are still increasing by double digits. The rents are still high due to a double-digit percentage increase starting September last year.

Selma Hepp, CoreLogic’s deputy chief economist, said the rent rate in the early month of 2022 has quadrupled. Still, it is rapidly decelerating and is expected to continue until hitting the long-run average of about 3% to 4% rent growth.

National rent decreased in December.

The trend in the rental market remains uncertain. (Photo: Sandra Davidson Estate Agents)

Decreasing Rental Deals

According to Yahoo Finance, some states have shown a declining rental deal, with Western states leading the pack. Idaho experienced the biggest annual decline, with rentals falling 5.4% from December 2021. The following three states to experience declines were Nevada (-2.7%), Arizona (-2.5%), and Oregon (-2.4%).

Increasing Rental Deals

Meanwhile, Southern states showed a rapid increase in rent. According to Yahoo Finance, Florida ranked first with a 23.9% increase. Other notable states with more than a 10% increase include Arkansas (+17.5%), Delaware (+14.5%), Tennessee (+14.2%), Mississippi (+13.2%), and North Carolina (+12.2%). Outside of the Southern states, New York recorded 20.1%, which is the second-highest annual rent growth.

Hepp said that the decreasing rental deals in the Western states can be attributed to immigration from areas with expensive living costs and moving to Southern states known for their considerably cheaper living costs.

The stability of rent remains debatable, but some forecasts say that rent growth is expected to decrease. Hepp said, “Just seeing what’s happening with the rental market, I think we’re going to probably see levelling off where there’s no growth for a few months before it ‘picks up again’ to more normal growth levels.”