Realtor.com has released a new report examining how falling rents are reshaping renter behavior across U.S. cities. The report finds that lower rents are prompting many renters to move for more space, better affordability, or improved amenities. Among cities in the U.S., Denver has shown the highest decline in rent.
Highlights
- Realtor.com’s latest report examines the recent drop in rents and how it’s affecting renter behavior nationwide
- Denver has witnessed the biggest year-over-year rent drop in the past year.
- A need for a larger space and better affordability are among the top reasons for renters moving.
Denver Tops List of Cities Where YoY Rents Have Dropped
The home rental market has seen changes since the pandemic era. With rents going up and down, renter behavior has also changed significantly. This situation was recently studied through Realtor.com’s rental data.
According to a report on Realtor.com, there was a decline in the home rental market in the past two years. Experts attribute the decline to factors like housing oversupply and economic pressures, giving renters more options and negotiating power. It has also led to renters negotiating for larger spaces or changing neighborhoods.
While the shift challenges real estate agents, renters are taking advantage of lower prices to move to neighborhoods that better fit their needs and plan for future homeownership. When this change comes, it will shift the market as renters become potential buyers.
Rents have dropped significantly in many U.S. cities. However, Denver has emerged with the biggest drop in rent in recent years. With a median asking rent of $1,785, it has seen a 7% year-over-year (YoY) decline in rent.
Even with the largest rent drop, Denver’s rents remain higher than they were before the pandemic. Denver’s rental market is softer and more affordable than other cities in the U.S. Stable rent growth has benefited renters, but posed challenges for landlords and investors seeking higher returns.
Rent Drop and Renter Behaviour
A key takeaway from Realtor.com’s report is what’s driving the recent drop in rents. When looking for the cause behind the drop in rent, oversupply has emerged as one of the reasons. With various housing developments emerging in cities across the country, renters have many options when searching for the right home.
Housing oversupply has pushed rents lower, giving tenants a chance to upgrade to larger or better-located homes. Renter behavior has certainly changed, as people are looking for comfort with affordability.
Access to modern amenities, prime locations, and newer neighborhoods are now top reasons renters decide to move. Lower rents are also encouraging renters to consider homeownership, even if most aren’t ready to buy right away.
