Rents dropped in May for the tenth consecutive month, albeit at a slower pace, according to the latest Realtor.com Rental Report.
The median asking rent nationally for 0-2 bedroom units fell by -0.7% ($13) from May 2023 to $1,732. This is only $24 (-1.4%) below its August 2022 peak. The decline was recorded in all size categories.
However, Realtor.com also pointed out that the Consumer Price Index for shelter was up 5.5% year-over-year in April after rising 5.7% in March; it was also down from a peak of 8.2% in March 2023. Median asking rents are up by 21.5% over the past five years.
“Slowing rent growth preceded slower shelter inflation and falling market rents – as we’ve seen in the last 10 months of Realtor.com data – have furthered that deceleration in shelter prices,” said Danielle Hale, chief economist at Realtor.com. “As a significant driver of overall inflation, shelter costs need to slow further and are expected to do so. However, waning market rent declines foreshadow smaller Consumer Price Index shelter declines ahead and put a question mark on whether we’ve seen enough to rein in overall inflation, complicating the Fed’s policymaking.”
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