A new study from Zillow Group (NASDAQ: Z, ZG) found 33.2% of rental listings on the Zillow platform offer concessions such as free weeks of rent or free parking as an incentive to attractive prospective tenants. This is up slightly from 33% in June and 25.4% one year ago.
The new percentage is up significantly from July 2022 when the offering of at least one concession was at a 29-month low at 19.4%. That level peaked at 33.6% in April.
More than half of rental listings on Zillow are offering a concession in six major metro areas: Raleigh (53.3%), Charlotte (53%), Atlanta (52.2%), Salt Lake City (50.9%), Nashville (50.8%) and Austin (50.5%). Four major metros have a smaller share of listings with a concession than last year, indicating a more competitive rental market: San Jose (-9.7 percentage points), Baltimore (-5.6), Milwaukee (-1.8) and Pittsburgh (-0.2).
The rental vacancy rate held steady at 6.6% in the second quarter, where it has sat for the past four quarterly readings for the highest level since winter 2021.
“Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits,” said Zillow Chief Economist Skylar Olsen. “Now is a great time for renters to find a deal, with more new apartments hitting the market than at any time in the past several decades. Rents are still growing, but it’s a far cry from the steep rent hikes of two or three years ago, and renters will find sweeteners being offered by more than half of rentals in some places. A slowing job market and lower mortgage rates could mean falling rents if the current trends hold.”
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