For renters in the United States, it’s hard to see much good news when nearly two-thirds of independent landlords plan to raise their rent prices within the next 12 months — especially since average rents are still near record highs. But there is a silver lining: Percentage-wise, fewer landlords plan to raise rents now than did last fall, according to a recent survey from Avail by Realtor.com.
The survey of 2,500 landlords and renters, conducted a couple of months ago and released on May 17, found that 65.1% of landlords plan to raise the rent at one or more properties over the next year. That’s down from 70.4% in October 2022.
Nearly half of surveyed landlords (48.2%) who aren’t raising rents for renewals said they want to avoid tenant turnover — an important consideration in the current market, where finding a new tenant can be difficult. About four in 10 landlords cited a strong relationship with tenants as a reason they don’t want to raise rental prices for renewals.
Just less than one-third (32.4%) of landlords said they are already charging rents at fair market value. About 15% said they expect average rents to decrease in the next 12 months.
The latter hasn’t happened on a wide scale yet, though rental prices are trending in the right direction if you happen to be a renter. In April, median rents nationwide rose by only 0.29% from the previous year, according to the latest Rent.com data. That was the smallest yearly increase in more than three years. Yearly rent growth has decelerated eight months in a row.
The national median rent was $1,967 a month as of April 2023 — down from $1,971 in March but $30 higher than the most recent low of $1,937, set in February. Rents peaked at $2,053 in August 2022.
Nine states saw a year-over-year decline in rents in April, including nine in the West (Idaho, Nevada, Arizona, Washington and Oregon), two in the Midwest (Illinois and Kansas), one in the South (Texas) and one in the Mid-Atlantic (Maryland).
On the other end of the spectrum, these are the five metro areas that saw the biggest increase in average rents in April:
- Providence-Warwick, R.I./Mass. (+15.97% year over year)
- Raleigh-Cary, N.C. (+12.43%)
- Indianapolis-Carmel-Anderson, Ind. (+10.94%)
- Charlotte-Concord-Gastonia, N.C.-S.C. (+10.50%)
- Cleveland-Elyria, Ohio (+9.66%)
The Avail survey found that even though more than half (54.9%) of renters think they can’t afford a rent increase, not many have negotiated a more modest price hike. Of those who recently renewed their leases, only 28% tried to negotiate with their landlord — down from 34.7% in October 2022 and 38.7% in July 2022.
Despite a challenging rental market for tenants, the vast majority plan to keep renting over the near term because of an even more challenging home buying market.
The Avail survey found that fewer than one-third of renters (30%) are considering purchasing a home in the next 12 months — which means about 70% are not considering buying a home. That continues a recent trend that has seen a rising number of renters decide to forgo buying a home this year.
More From GOBankingRates