Rental costs drop for the third straight month.

Redfin’s latest rental update shows a reprieve for renters, continuing a trend we’ve seen over the past few months. Here are the major takeaways from December:

  • The median asking rent is now $1,964, down 0.8% from last December, the third consecutive annual decline (-0.3% YoY in October and -2.1% YoY in November, the largest drop since 2020).

  • Rental vacancies have increased to 6.6% as the supply of apartments has increased

  • Rent concessions rose with 33% of rentals now advertising incentives on listing services such as Zillow

  • Rents in the Midwest are rising faster than anywhere else

    • Midwest: $1,434 up 3.7%

    • Northeast: $2,439 up 1.7%

    • South: $1,632 down 1%

    • West: $2,346 down 0.6%

Our take

Since we’re agents who sell homes, you might be wondering why we’re talking about rental rates. We’ve got a simple answer: Inflation! The metrics we use to measure inflation – the CPI report, e.g. – heavily weights rental prices in their calculation. The more rental prices go down, the faster our inflation measurements go down. And the faster they go down, the faster mortgage rates will fall and the faster home sales will rise, so – suffice to say – we’re gonna keep a watchful eye on this.

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