Rents fell 0.6% in October, new data shows

11/12/2024 21:03

Rents ticked down in October from the prior month as the supply of apartments coming onto the market outpaces demand.

Rent prices ticked down 0.6% in October from the prior month as the supply of apartments coming onto the market outpaces demand.

The median asking rent fell to $1,619 in October, new data from Redfin showed Tuesday, a drop from last month but a slight 0.2% increase from a year ago.

This data comes one day before the government’s Consumer Price Index (CPI) report for October. Shelter costs have been one of the biggest contributors to inflation over the last year, with shelter and food costs accounting for 75% of the increase in the CPI in September.

Softening in rent increases also comes as new multifamily housing units are being completed at the fastest pace on record since 1994, which has pushed lower in metros where supply surpasses demand, Redfin’s senior economist Sheharyar Bokhari explained.

For example, Tampa and Jacksonville have seen the largest rent declines following a pandemic-driven surge in demand, which led to a construction boom across several Sun Belt states.

In recent months, however, there’s been a shift in construction patterns with a slowdown in multifamily projects.

“Construction is slowing, but we will continue to see a wave of new apartment buildings coming onto the market in coming months, which is good news for renters looking for an affordable rental in 2025,” Bokhari said.

Overall, rents have largely remained flat over the past two years. But a widespread cooldown in rents hasn’t yet passed all the way through to shelter inflation readings, which have stayed stubbornly sticky for the past two years, due to how the BLS collects rent data.

A new luxury condo development in the Bronx borough of New York on July 11, 2024. As New York and much of America baked in heat waves this week, the relatively poor borough of the Bronx suffered disproportionately. Many of the people of the Bronx are low-earning Latinos or African Americans, who say the heat- absorbing buildings that line street after street make life -- and even breathing -- difficult in the scorching, muggy weather of New York in the summertime. (Photo by ANGELA WEISS / AFP) (Photo by ANGELA WEISS/AFP via Getty Images) — Rent prices ticked down 0.6% in October from the prior month as the supply of apartments coming onto the market outpaces demand.(Photo by ANGELA WEISS / AFP) (Photo by ANGELA WEISS/AFP via Getty Images) · ANGELA WEISS via Getty Images

In a press conference last week, Fed Chair Jerome Powell said rents for newly signed leases “are experiencing very low inflation.”

“And what's happening is older…leases that are turning over are taking several years to catch up to where market leases are,” Powell added. “So that's just a catch-up problem. It's not really reflecting current inflationary pressures, it's reflecting past inflationary pressures.”

Dani Romero is a reporter for Yahoo Finance. Follow her on X @daniromerotv.

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