Mortgage rates are widely expected to fall this year, which would make it easier for potential homebuyers. But renters are also likely to feel some much-needed relief, after grappling with years of high prices. Since the pandemic took hold in 2020, Rent.com says year-over-year rent rose for 37 months.
Median asking rents grew more than 20% over three years, spiking to more than $2,000 a month twice in the past two years, before finally starting to drop last fall.
In December, rental platform Zumper found rent prices dropped in 55 cities in 2023, with prices staying flat in 17 other areas.
Holden Lewis, a housing and mortgage expert with Nerdwallet, predicts rent prices will keep dropping through the first half of 2024.
"I think you're going to see less upward pressure on rents. And the reason is that there has been this record number of apartments under construction all year," said Lewis.
The real estate firm CBRE says nearly a million multi-family homes are under construction and more supply means lower prices for renters.
CBRE predicts an expensive homebuying market will also fuel more leasing, with monthly mortgage payments for a new home sitting 35% higher than average monthly rent in 2024.
"We've heard from property managers that they're giving more concessions today than they were a year ago," said Kate Terhune, the director of brand for Rent.com. "That could mean anything from a free month of rent to paid utilities, access to luxury amenities or even discounts on local restaurants or retailers."
Terhune also says rental prices have dropped three months in a row, and she believes it's a sign of bright times ahead for the economy.
"Another monthly drop is further evidence that rent prices are returning to cyclical patterns that we saw before the pandemic. So, this could mean more predictability and a little bit more of a stable rental market," she said.
SEE MORE: Experts expect US housing market to change in 2024
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