Rental prices in the United States have been on a downward trend for the past 10 months, according to a report from Realtor.com. However, the latest data shows that this decline is starting to slow down, with asking prices increasing slightly in May compared to April. The median asking price for rent in May was $1,732, up $10 from the previous month.
This stagnation in progress on rental costs is concerning, as it may indicate that high inflation is here to stay. Rent has been a driving force behind inflation for months, as pandemic lockdowns, pent-up demand, and record-high housing prices have sent costs soaring. The report from Realtor.com warns that this slowdown in progress could hinder further improvements in the overall rate of inflation and add long-term uncertainties. It also underscores the need for additional housing construction to alleviate the supply shortage contributing to higher costs.
High rents are particularly concerning for lower- and middle-income families, as housing costs most directly affect household budgets. Roughly 34% of households are renters, with that figure even higher for lower- and middle-income families. More than half of households with family income below the national median are renters.
While some areas in the South and West saw the largest rent decreases, there were also increases in rental prices in certain parts of the Midwest. The report highlights that new housing supply in cities like Austin, Texas, Nashville, Tennessee, and San Antonio, Texas, contributed to the decline in rental prices. However, cities like Indianapolis, Milwaukee, and Minneapolis saw a spike in rental prices last month.
Overall, the data suggests that while there are some signs of easing in certain parts of the country, high rental prices may continue to be a significant issue for many households.