Rental Market Starting to Cool Down, Even in ‘Hot’ Cities

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There is finally somewhat of a slowdown in the soaring prices of rents over the last year, even in what are considered “red hot” cities such as Miami, a new report indicated.

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Zumper’s National Index shows that one-bedroom rent is up 0.5% over last month — another all-time high — but represents a more reasonable growth rate than the one to two percentage point increases that became the norm during the height of the pandemic, according to a press release.

Typically, rent prices are at their highest in the summer, which is considered the busiest season. However, Zumper’s National Index shows two-bedroom apartments down by 2.9%. 

“With an unpredictable stock market, the ever-increasing cost of living, ongoing war in Ukraine, and talk of a recession, many consumers are tightening their wallets and reconsidering their living arrangements yet again. For many would-be home buyers, the recent interest-rate hike was the final straw, and mortgage applications fell to a 22-year low this month, according to the Mortgage Bankers Association,” Zumper said in the release.

Miami’s soaring market is starting to come down, as the city fell two spots in June and is now the fifth most expensive metro in the United States. San Jose has taken Miami’s place as the country’s third most expensive rental market.

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In June, Miami’s median one-bedroom rent was pegged at $2,400, a 5.9% decrease from the previous month. Other cities in Florida also saw decreases in median one-bedroom rent, with Tallahassee down 6.5% in June, Fort Lauderdale down 5.8% and Tampa down 1.2%.

New York City Remains Expensive in Terms of Rent 

On the other hand, New York City remains the most expensive city — the current median one-bedroom rent of $3,600 is an increase of 40.1% over the same time last year. Meanwhile in NYC, the median two-bedroom rent is now $3,950, a whopping 44.7% year-over-year increase and a 5.9% month-over-month hike. San Francisco, San Jose, Boston and Miami round out the top five most expensive cities. 

In terms of the “top fallers” for the month in terms of a median price change in one-bedroom apartments, Tallahassee takes the No. 1 spot, with a $860 median rent — or a 6.5% month-over-month decrease. Anchorage, Alaska; Urban Honolulu, Hawaii; San Diego, California; and Syracuse, New York, comprise the five cities with the fastest cooling rental markets.

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Renters can expect a continued cooldown in apartment prices over the next several months — but not a complete downturn, Crystal Chen, a  spokeswoman for Zumper, told Bloomberg.

“We likely won’t see a significant decrease in prices since we’re still facing a housing shortage and the labor market remains strong,” she said.

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