Asking rents for newly constructed apartments fell to $1,746 in the second quarter, according to new data from Redfin (NASDAQ: RDFN). This is a 6.2% decline from one year earlier – as well as the second consecutive quarter for declines, the second-steepest drop in five years and the lowest level recorded in more than two years.
Rents for one-bedroom apartments were down 9% year-over-year to $1,566, while two-bedroom apartments dropped 4.5% to $1,934 and three-or-more-bedroom apartments fell 3% to $2,309. Studio apartments, however, went in the opposite direction as asking rents inched up by 0.9% to $1,617 – Redfin attributed that rise to the lower number of available studios, which are more likely to be in larger and more expensive cities.
Monthly asking rents for new apartments hit a peak of $1,889 in the first quarter of this year as apartment completions rose 18.7%, the highest number in over a decade.
“Rents for new apartments will likely fall a little more this year, because there are still a ton of new buildings being completed,” said Redfin Senior Economist Sheharyar Bokhari. “With new apartments popping up everywhere, owners are competing with one another to find tenants by reducing rents and offering concessions like free parking. If you’re a renter in a market like Dallas or Nashville, where construction has been booming, there are likely deals to be found.”
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