According to Redfin, shrinking tenant budgets have had a measurable impact on the growth of asking rents. July’s 14% increase was the smallest since November 2021 as landlords reacted to the reduced spending power of current and prospective tenants.
The national median rent payment went up to $2,032 in July—14% higher than a year ago, compared to a revised year-over-year increase of 15% in June and 16% in May.
Rent climbed only 0.6% month-over-month, down from 2.1% a year earlier, making it the slowest increase since February.
Rent growth slowing but still faster than overall inflation
Overall inflation is still slowing faster than the growth of rent payments, but we may finally see an end to big rent hikes—or at least a significant reduction in them.
Tenant budgets remain strained by the rising cost of gas, groceries, and other regular expenses. Landlords have taken notice, mainly because fewer tenants can afford the rent—let alone rent increases.
The median asking rents for most of the 50 most populous U.S. metros have increased month-over-month and year-over-year. Only three metros on the list saw a decline.
Top 10 Metros with Fastest-Rising Rents
Redfin Chief Economist Daryl Fairweather expects rental growth to continue slowing in most markets. She pointed out that markets with limited new housing construction and strong job growth—like Seattle and New York—will likely continue to see large rent increases.
According to Redfin’s report, Cincinnati is at the top of that list, with rents rising 31% year over year in July—down from a 39% increase in June, when Nashville, Seattle, and Austin also saw increases of over 30% from a year earlier.
Cincinnati was the only metro that experienced a year-over-year increase of over 30% in July, but nine other metros saw rent increases of over 20%.
- Cincinnati, OH (31%)
- Nashville, TN (26%)
- Pittsburgh, PA (24%)
- New York, NY (23%)
- Newark, NJ (23%)
- Nassau County, NY (23%)
- New Brunswick, NJ (23%)
- Seattle, WA (22%)
- Indianapolis, IN (21%)
- San Antonio, TX (21%)
After topping the list for the first four months of 2022, Austin, TX and Portland, OR dropped out of the top ten in July.
Metros where rents declined (year-over-year)
Only three of the 50 most populous U.S. metros saw rents fall in July from a year earlier. Rents dropped 10% in Milwaukee, 8% in Minneapolis, and less than 1% in Baltimore.
- Milwaukee, WI (-10%)
- Minneapolis, MN (-8%)
- Baltimore, MD (-0.3%)
Minneapolis and Milwaukee have both seen declining rents since April of this year, but this is the first month Balmore saw a drop in asking rents.
Top takeaways for real estate agents
If you’re an agent in an area with faster rent growth, collect the data you need to help buyers see the advantages of homeownership vs. renting. Show them what they’d spend over the course of a year on rents vs. how much equity they could build.
Sellers, too, need to be aware of the rental market in their area. Slowing rent growth could impact the number of buyer offers, but the slowing of overall inflation could just as easily send more buyers back into the market.