First Annual Drop in Rents Since Pandemic Began, Redfin Says

‘There are fewer people willing to splurge on rentals right now,’ economist says

By Joseph Pisani and Talal Ansari of The WSJ. Excerpts:

"Rental prices are easing after years of soaring during the pandemic.

Median rent fell 0.4% to $1,937 in March from a year ago, according to a report released Friday by Redfin Corp. It was the first annual decline since March 2020, when the pandemic began, the real-estate company said. The drop brought rents to their lowest level in 13 months. 

Rents remained 19.9% higher than they were at the pandemic’s beginning three years ago, Redfin said.

Rents grew over much of the pandemic as a rise in home-sale prices kept some people from buying and drove demand for rentals. In recent months, rents have been falling. Analysts say that is because of an increase in new apartment construction along with weaker consumer sentiment, which may be drawing people away from signing pricey leases." [in the short-run the increase in demand will raise prices-but those higher prices in the long run bring in more firms and/or capital-that increase in supply ends up lowering prices-this is what we say happens in the long run in perfect competition in micro]

"Still-high inflation has people paying more for groceries and many other items, said Daryl Fairweather, Redfin’s chief economist. That has some looking to save on housing, sometimes by getting roommates, she said."

"Renters with new leases in January paid a median rent that was 3.5% lower than they would have paid last August"

"the biggest decline among U.S. metropolitan areas was in Austin, Texas, where rents fell 11% in March, to $2,104, from the same month a year ago."