Renters are less likely to look for new apartments during the colder months and before the holidays. As such, the cold season usually brings a slowdown in rent growth. Accordingly, the U.S. average rent declined in two consecutive months at the end of 2019, dipping to $1,474. Specifically, rates went down by 0.1% in both November and December, with prices flat-lining in 94% of American cities and shrinking in another 3%. Prices increased in only 3% of cities in December.
In particular, renters in Stamford, CT, paid $90 less in December after the city experienced the fastest rate of decline in the nation – 3.7%. Stamford’s neighbor to the north, New Haven, CT, recorded the second-fastest monthly drop (2.1%), followed by Odessa, TX, where rents shrank by 1.6%.
Meanwhile, Ventura, CA, posted the fastest rate of increase in the nation at 2.2%, and is the only city where prices appreciated by more than 2% in December. Augusta, GA, had the second-best rate hike (1.8%), while Gainesville, FL, and Eugene, OR, tied with a 1.2% uptick in both of their average rents.
Rents also saw the slowest year-over-year rise in 17 months, at 3%. Furthermore, growth was slower at the end of 2019 than it was in the previous year, when rents increased by 3.2%, according to a recent report by RENTCafe.com. In net dollars, renters saw a $43 rate hike compared to December 2018. The yearly wind-down comes after a decade of booming apartment construction, in which more than 2.4 million units were delivered to markets across the U.S. – relieving some of the pressure that the growing demand for apartments has placed on the multifamily sector.
Rates Decrease in Majority of Largest Renter Hubs in December
Rents dwindled in 12 of the 20 most significant renter hubs in December. Orlando, FL,($1,423) and Fort Worth, TX, ($1,128) lead the trend after they both saw a 0.9% monthly drop, followed by Charlotte, NC, ($1,234) and its 0.8% decline.
However, prices in all of the most significant renter hubs increased year-over-year. The average rent in Phoenix, AZ, ($1,123) saw the most significant year-over-year growth, surging 9.6% since December 2018 – or $98 in net dollars. It’s also the only renter hotspot where rates rose by more than 6%. Prices in Las Vegas, NV, ($1,107) inflated the second-fastest, posting a 6% increase. The two southwestern cities are followed by Austin, TX, ($1,436), where prices shot up by 5%.
Conversely, apartments for rent in Houston, TX, ($1,109) saw the slowest 12-month rent hike; their prices increased by a modest 1.4% in the past year. Orlando, FL, ($1,423) and Manhattan, NY, ($4,211) trailed behind with the second- and third-slowest yearly increases – 1.6% in Orlando, and 1.9% in Manhattan. The three cities are also the only markets with yearly increases below 2% in December.
To view a breakdown by city size and access the methodology, read the full report on RENTCafe.com.