U.S. median rent increased 2.2% annually in February to $1,981, the largest annual increase since January 2023 and up 0.9% from the previous month.
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Asking rents in February saw their biggest annual increase in more than a year, a new report shows.
A report released by Redfin on Monday showed that the U.S. median rent increased 2.2% annually in February to $1,981, the largest annual increase since January 2023 and a 0.9% increase compared with the previous month. .
Redfin economists said one reason for the sharp increase is that asking rents were at a low point last February, while rising mortgage rates may also be driving up rental demand.
Darryl Fairweather
“Mortgage rates moved back up in February, which is disappointing for potential homebuyers who saw a glimmer of hope just a few months ago when rates finally started to fall,” said Daryl Fairweather, chief economist at Redfin. “With interest rates still high, many people are choosing to continue renting, which boosts rental demand and thus rental prices.”
The Federal Reserve is expected to lower interest rates before the end of the year, which could lead to more renters becoming buyers and slower rental price growth.
While rents increased in February, prices were relatively stable compared with the past two years, when the pandemic sent rental prices on a rollercoaster ride in cities across the United States. Compared with the rapid growth during the epidemic, national rental growth will slow down in 2022, and national rental prices will actually decline in 2023.
Asking rents in February were $73 below the record high set in August 2022, but still $387 above February 2020, the month before COVID-19 was declared a pandemic, driven higher by the relocation boom paid rent.
The largest rent increases in February were in the Midwest and Northeast. Median rents in the Northeast increased 5.2% year-on-year in February, the largest increase in nine months. Rent in the Midwest rose 4.9% to $1,441, the largest increase in five months.
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